The Process of Strategic Decision-Making in

Libyan Commercial Banks

By

Nagah Abdulaziz M Ftes

A thesis submitted to the University of Gloucestershire in accordance

with the requirements of the degree of Doctor of Philosophy in the
Faculty of Business, Education & Professional studies

PhD

2013
 DECLARATION
I declare that the work in this thesis was carried out in accordance with the regulations
of the University of Gloucestershire and is original except where indicated by specific
reference in the text. No part of the thesis has been submitted as part of any other
academic award. The thesis has not been presented to any other education institution in
the United Kingdom or overseas.
Any views expressed in the thesis are those of the author and in no way represent those
of the University.
Nagah Ftes

Signed ……................................... Date ……....................................

ii
 ABSTRACT

The thesis describes an exploration and analysis of the nature of strategic decision-
making processes (SDMP) in Libyan Commercial Banks. The role of ‗rationality‘,
‗intuition‘ and ‗political behaviour‘ in five strategic decisions of very high importance
were explored in this study, by conducting sixteen face-to-face interviews with senior
decision-makers, all closely involved with the decisions, from three commercial banks.
Other observations of SDM behaviour and documentary information were also
recorded. Field work enabled analysis and interpretation of the perceived influence of
`decision importance` on the process, as well as an exploration of the three key
influencing factors on the SDMP.

Consistent findings for the nature of the process were found for all five decisions.
Rationality was a key factor of the process. Considerable efforts were made by key staff
to gather and analyse information, discuss issues, as well as engage consultants and seek
advice from Commercial Banks outside Libya. This finding appeared to reflect the high
importance of the decisions coupled with the inexperience of the senior management
group. This lead to some anxiety and, as a consequence, risk-reducing activities. The
SDs were based on analysis, advice and past experience, rather than on personal
judgement. None of the banks exhibited strong political or intuitive behaviour in their
DMPs. Instead there was constructive consultation in making decisions. DM was driven
by clear decision motives, the importance attached to the decision, and a committed
effort to minimize uncertainty and risk. Other factors considered were that the decisions
were financially rewarding, delivered customer satisfaction and employee welfare, as
well as being socially acceptable.

Analysis of the data has enabled the development of a model which is consistent with an
interpretation that places ‗anxiety‘ in the senior management group as the dominant
factor driving the adoption of a rational approach to DM, with low intuitive or political
activity. Anxiety is derived from the crucial importance of the decision, the relative
inexperience of the senior management group, and some policy pressure from the
Central Bank of Libya to change and modernize banking methods. The availability of
resources and time to the senior group, in a generally munificent environment, also
made it feasible for senior staff to adopt rational methods of analysis for DM, and as a
consequence reduce their degree of anxiety.

iii
 ACKNOWLEDGMENTS

My most sincere thanks to Allah whose love and guidance directed me when I was most
in need, My greatest thanks also go to my parents, without their prayers to God I would
never have started and completed this thesis I thank them too, from the bottom of my
heart, for their unconditional love has been such a source of inspiration. My brothers
and sisters provided unreserved support and encouragement during my PhD study and
they too are thanked wholeheartedly. I love you all.

Thanks also to my direct supervisor at University of Gloucestershire business school -

Professor Tony Gear and my co-supervisor Dr Hong Shi. Their guidance and unfailing
support has been invaluable and consistent. I will not forget the hard time that they gave
me because in the end it was all worthwhile. I would like to thank Professor Barry
Davies, and Philippa Ward for their great co-operation to solve any problems which I
faced.

I have to thank a group of people who worked at the University of Gloucestershire

business school, library staff, academic research office, international office for their
help and services during my study. Also, I appreciate a number of people in the CILC
Language department the time that they gave in polishing this thesis, especially Cris
Wassell.

I have to thank the Libyan government for support financial throughout my study. I owe
grateful thanks to all the staff in the Libyan Cultural Affairs Department for effort and
assistance. Also, I like to thank Dr. Issam Sallomi and his family for their assistance
during my study. Also, I thank all my friends and colleagues, for their support and
advice.

Thanks too to all those, too numerous to mention, but you know who you are.

iv
 DEDICATED

To she who pleased my heart when I met her:

My mother

To he who encouraged me to work hard to reach my

ambitions: My father

To those whose constant support, patience and love, have

allowed me to continue and complete this journey:
My brothers and sisters

With love

v
TABLE OF CONTENTS

Chapter One :Introduction ......................................................................................... 1

1.1 Introduction .............................................................................................................. 1

1.2 The Importance of this Study ................................................................................... 2
1.3 The Aim and Research Questions of the Study ........................................................ 6
1.4 The Research Objective……………………………………………………………7
1.5 The Researcher Journey……………………………………………………….…..8
1.5 Structure of the Study............................................................................................... 9

Chapter two: The Libyan context and Commercial Banking Sector .................... 10

2.1 Introduction ............................................................................................................ 10

2.2 Libyan Religion and culture ................................................................................... 12
2.3 The Central Bank of Libya (CBL) ........................................................................ 14
2.4 The Libyan Commercial Banks ............................................................................. 15
2.4.1 Diagnosis of the Situation of Libyan Commercial Banks ................................... 16
2.4.2 Reform of the Banking System ........................................................................... 17
2.4.3 The Relationship between the Central Bank and Commercial Banks of Libya .. 18
2.5 Summary ................................................................................................................ 20

Chapter Three: Literature Review: Organizational Decision-Making................. 21

3.1Introduction ............................................................................................................. 21
3.2 Defining Key Concepts of Strategic Decision-making ......................................... 21
3.2.1 Introduction ........................................................................................................ 21
3.2.2 Definitions of Strategic Decision-Making .......................................................... 21
3.2.3 Strategic Decision Makers .................................................................................. 23
3.2.4 Organizational Culture and Strategic Decision-Making ..................................... 24
3.2.5 Strategic Decision Effectiveness ......................................................................... 25
3.2.6 Cost-Risk Management and Strategic Decision-making ................................... 26
3.3 Managerial Behaviour Perspective of Strategic Decision-Making ........................ 28
3.3.1 Introduction ......................................................................................................... 28
3.3.2 Rationality and Strategic Decision-Making ........................................................ 30
3.3.2.1. Rational Economic Theory ............................................................................. 31
3.3.3 Political Behaviour and Strategic Decision-making .......................................... 33
3.3.4 Intuition and Strategic Decision-making ........................................................... 36
3.4 Garbage-Can Model ............................................................................................... 40
3.4.1 Characteristics of the Garbage-Can Model ......................................................... 40
3.4.2 Criticism of the Garbage-Can model .................................................................. 41
3.5 Rational Perspective Models .................................................................................. 41
3.5.1 Introduction ......................................................................................................... 41
3.5.2 Utility Theory Decision-Making ....................................................................... 41
3.5.3 Multi-Criteria Decision-Making ......................................................................... 43
3.5.4 Balanced Scorecard ............................................................................................. 43
3.5.5 SWOT Analysis .................................................................................................. 44
3.6 Decision-Specific Characteristics of Strategic Decision-Making ......................... 45
3.6.1 Introduction ......................................................................................................... 45
3.6.2 Decision Importance ........................................................................................... 45
3.6.3 Decision Motives ................................................................................................ 46
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3.6.4 Decision Uncertainty........................................................................................... 47
3.7 Firm Characteristics Perspective of Strategic Decision-Making ........................... 49
3.7.1 Introduction ......................................................................................................... 59
3.7.2 Company Size ..................................................................................................... 59
3.7.3 Performance ........................................................................................................ 50
3.8 Environmental Factors Perspective of Strategic Decision-Making ...................... 52
3.8.1 Introduction ......................................................................................................... 52
3.8.2 Environmental Uncertainty ................................................................................. 53
3.8.3 Environmental Hostility-Munificence ................................................................ 55
3.9 Conceptual Model .................................................................................................. 57
3.9.1 Introduction ......................................................................................................... 57
3.9.2 The Conceptual Model ........................................................................................ 57
3.9.3 The Justification of the Conceptual Model ......................................................... 59
3.10 Summary .............................................................................................................. 60

Chapter Four: Research Methodology and Data Collection ................................. 61

4.1 Research Methodology and Methods ..................................................................... 61

4.1.1 Introduction ......................................................................................................... 61
4.1.2 Research Philosophy ........................................................................................... 62
4.1.3 Research Design .................................................................................................. 65
4.1.4 Rationale for Choosing Qualitative Research ..................................................... 65
4.1.5 Qualitative approach-Strengths and limitations .................................................. 66
4.1.6 A case Study Approach ....................................................................................... 68
4.2 Data Collection Methods ....................................................................................... 70
4.2.1 Data Collection.................................................................................................... 70
4.2.1.1 The Interview Instrument ................................................................................. 70
4.2.1.2 Informal Observation ....................................................................................... 73
4.2.1.3 Documentary Analysis ..................................................................................... 74
4.2.2 The Study Population and Sample Selected........................................................ 75
4.2.3 Bank Selection .................................................................................................... 78
4.2.4 The Method of Selection for SDMP ................................................................... 79
4.2.5 Personal Interview Arrangement ....................................................................... 80
4.2.6 The Selection of Interviewees ............................................................................. 81
4.2.7 Rationale for the Selection of Personal Face-to-Face Interviews ...................... 82
4.2.8 Design of the Interview ...................................................................................... 83
4.2.9 Conducting the Interviews .................................................................................. 84
4.2.10 Piloting the Interview Instrument ..................................................................... 85
4.2.11 Ethical Considerations ..................................................................................... 86
4.3 Data Analysis Process ........................................................................................... 87
4.3.1 Data Analysis ...................................................................................................... 87
4.3.1.1 TransCribing .................................................................................................... 88
4.3.1.2 Open Coding .................................................................................................... 88
4.3.1.3 Generating Themes .......................................................................................... 88
4.3.1.4 Axial Coding .................................................................................................... 89
4.3.1.5 Selective Coding .............................................................................................. 89
4.3.2 Validity and Reliability ....................................................................................... 91
4.3.3.1 Credibility ........................................................................................................ 91
4.3.3.2 Transferability .................................................................................................. 94
4.3.3.3 Dependability ................................................................................................... 93
4.3.3.4 Confirmability .................................................................................................. 93
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4.3.3 Analysis Method Process .................................................................................... 94
4.4 Summary ................................................................................................................ 95

Chapter five: Data Analysis of Each Strategic Decision ........................................ 96

5.1 Introduction ............................................................................................................ 96

5.2 Data analysis for New Technology Decision (Bank A)........................................... 99
5.3 Data analysis for the Islamic Murabaha Decision in Bank (A) ............................. 110
5.4 Data analysis for the Islamic Murabaha Decision in Bank (B).............................. 120
5.5 Data analysis for Training Decision (Bank B) ....................................................... 130
5.6 Data analysis for Training Decision in Bank (C) ................................................... 140
5.7 summary of key Findings for Strategic Decisions…………………………..…148
5.8 Summery ............................................................................................................. 149

Chapter Six: Findings and Discussion ................................................................... 150

6.1 Introduction .......................................................................................................... 150
6.2: Part One: Discussion of Analysis........................................................................ 150
6.2.1. The influence of managerial factors on the SDMP .......................................... 151
6.3 Discussion of the Findings Compared with other Studies ................................... 168
6.4. The Summary ..................................................................................................... 182

Chapter Seven: Conclusions of the Research ........................................................ 183

7.1 Introduction .......................................................................................................... 183

7.2 Research Approach .............................................................................................. 184
7.3 Empirical Results ................................................................................................. 184
7.4 The Theoretical Contributions ............................................................................. 188
7.5 Contributions to Practice ...................................................................................... 191
7.6 Limitations of the Study ....................................................................................... 194
7.7 Future Research Directions .................................................................................. 195
7.8 Personal Reflections of the Research Study......................................................... 196

References

Appendix (1) .............................................................................................................. 215

Appendix (2) .............................................................................................................. 216
Appendix (3) .............................................................................................................. 222
Appendix (4) .............................................................................................................. 228
Appendix (5) .............................................................................................................. 244
Appendix (6) .............................................................................................................. 250
Appendix (7) .............................................................................................................. 251

viii
LIST OF TABLES

Table 3.1: Managerial Characteristics of SDMP: observations from Past Studies ...... 29
Table 3.2: The Definition of Intuition from Past Studies............................................. 36
Table 4.1: Decision list ................................................................................................ 62
Table 4.2: Summary of documentation‘s strength and weaknesses ............................. 73
Table 4.3: Interviews schedules ................................................................................... 76
Table 4.4: Details of Interviewees and Banks Used in this Study ............................... 85
Table 4.5: Interview coding ......................................................................................... 90
Table 5.1: Strategic Decisions and Case Companies Used .......................................... 96
Table 5.2: Data Analyses – Themes and Sub-Themes used ........................................ 97
Table 5.3: Data analysis for new technology decision (Bank A) ................................. 99
Table 5.4: Data analysis for The Islamic Murabaha Decision (Bank A) ................... 110
Table 5.5: Data analysis for the Islamic Murabaha Decision (Bank B)..................... 120
Table 5.6: Data analysis for Training Decision (Bank B) .......................................... 130
Table 5.7: Analytical Results for Training Decision (Bank C) .................................. 140
Table 5.8: Summary of Key Findings for each Strategic Decision (SD) ................... 148

ix
LIST OF FIGURES

Figure 2.1: Libya Political Map ................................................................................... 11

Figure 3.1: The Conceptual Model for Studying SDMP ............................................. 58
Figure 6.1: Summary of Analytical Findings for all Five Decisions ......................... 151
Figure 6.2: Interpretive Framework ........................................................................... 167

x
LIST OF ABBREVIATIONS

SDMP ...................................................................Strategic Decision-Making Processes

DM ....................................................................................................Decision Making
SDs ................................................................................................ Strategic Decisions
CBL .......................................................................................... Central Bank of Libya
BSC .............................................................................................. Balanced Scorecard
MCDM ......................................................................... Multi Criteria Decision-Making
SWOT ........................................ Strengths, Weaknesses, Opportunities, and Threats

xi
 CHAPTER ONE: INTRODUCTION

1.1 Introduction

Strategic decision-making processes (SDMPs) play a key role in the success of an

organization and are influenced by various factors which make it a complex process.
This study aims to explore and critically analyse the nature of the SDMP in Libyan
Commercial Banks and the impact of environmental and contextual aspects on that
process.

Many studies stress the importance of DM and the DMP inside organizations. In the
context of this study, the meaning of SD is concerned with the activities that form the
process of making a decision, and is not concerned with the actual implementation of
that decision. This includes activities which contribute to making a decision, which are
called the ―pre-decision processes‖: identifying a decision, gathering and sorting
information, and alternative generation, followed by making the decision. The process
of activating a decision, the implementation stage, is called the ―post-decision-making
process‖ (Miller, 1990).

The literature on management has emphasized the importance of SD in organizations,

whether in large or small, private or public, as SD is a central and crucial task of
managers (Butler, 2002; Elbanna, 2003; Mori and Munisi, 2009; Melé, 2010). SDs are
the responsibility of top management and they mostly concern the relationship between
an organization and its environment (Nataraajan et al, 2000). In the view of Mintzberg
(1978), strategic decisions can be classified as formal or informal, and they may be
regarded as intended or emergent.

They are based on concerns that are central to the well-being and sometimes even the
survival of organizations, and often involve significant proportions of organizational
resources (Stahl and Grigsby, 1992). SDs are associated with risk, and comparative
assessment of different risky courses of action (Stahl and Grigsby, 1992). Managers
may be risk averse or risk accepting and they may have different attitudes to
opportunities based on their sensitivity to threats in the environment (Heavey et al.,
2009). Risk, and its associated cost, has an influence on SDM (Wilson et al, 2010,
p.700). Banking industry evidence suggests that environmental uncertainty has a

1
significant influence on information and decision processes in banking (Leblebici and
Salancik, 1981).

In organizations, managers face difficult and complex SD situations on a range of

issues, such as whether to enter new markets, develop new products, or acquire or sell
existing businesses, so that the organization can cope with change, benefit from
opportunities and mitigate threats (Deakins, et al., 2010). SDM is studied so that the
process of how decisions are actually made can be understood, and so that managers can
use the insight to improve their SD (Elbanna, and Child, 2007a). Studies of process may
help to highlight situation specific DM features and contribute to theoretical
understanding.

Generally, most of the literature emphasizes the importance of exploring a number of

elements that are associated with the SDMP, namely procedural rationality, political
behaviour, intuition, decision importance, decision motive, decision uncertainty,
environmental uncertainty, environmental hostility-munificence and culture (e.g., Dean
and Sharfman, 1993b; Dean and Sharfman, 1996; Rajagopalan et al., 1997; Milliner,
2006; Elbanna and Child, 2007a; Styhre et al., 2010). This study seeks to clarify the
impact of these various elements on the nature of the SDMP of Libyan Commercial
Banks.

1.2 The Importance of this Study

Strategic decisions play a crucial role in a firm‘s short- and long-term success and
failure (Hambrick and Mason, 1984; Eisenhardt and Zbaracki, 1992; Kim, 2012). For
that reason, SDM is a very important managerial activity and a contemporary date
understanding is necessary. Literature supports this point and provides further
justification for this study (Mintzberg, 1989). The need for this study is analysed from
methodological, theoretical, geographical, and industrial viewpoints.

The topic of SDMP has been an area of interest to researchers for a long time, but there
is still limited knowledge (Eisenhardt and Zbaracki, 1992; Papadakis et al., 1998,
Milliner, 2006), especially when contradictory results are reported by some researchers
regarding the elements that affect the SDMP and the effects of these elements with each
other. (e.g., Rajagopalan et al, 1997; Hough and White, 2003; Elbanna and Child,
2007a). Because of these contradictions, meaningful generalizations about the subject

2
have not been possible (Sharfman and Dean, 1991: Elbanna and Child, 2007a). Elbanna
(2003) noted that

“the same hypotheses can be examined in narrowly defined samples (e.g.

controlling for type of industries or SDs), or on samples drawn from diverse
geographical and industrial contexts, so that consistent research findings can be
accumulated and a more focused contingency theory of the influences on the
SDMP can be developed”. (p.297)

The effect of the national context on DM cannot be ignored. Khanna and Rivkin (2001)
note that with the widening of the global strategic management research community, the
national context is becoming more pronounced. Whittington et al. (2002) suggest that
sensitive knowledge translation from one context to another is potentially an important
source of value. Elbanna (2003, p 298) suggests that it is important to conduct further
studies in this field to develop better insights into the moderating roles of broader
contextual variables on the association between the SDMP dimensions and decision
outcomes. Recently, Dimitratos et al (2011) conducted a large-scale survey of 528 small
and medium-sized organizations in the USA, UK, Greece and Cyprus. They found that
cultural characteristics greatly influence the DMP. When the decision makers have good
knowledge about organizational and national culture, their decisions have a positive
impact on business (Branine, 2011).

SDMP understanding may be enhanced by paying further attention to the effect of

process capability (Hart and Banbury, 1994). Executives need to be able to formulate a
wide range of options, factor real-time information into their DM, and use consultants
effectively to resolve conflicts (Eisenhardt, 1989). This may facilitate timely and
effective DM in environments subject to rapid change. At the same time, in order to
reduce the cost of DM, decision-makers search for cost-effective and advanced
technology-based methods (Elamin and Branine, 2008). This leads to a certain emphasis
on rationality in approach.

Similar to procedural rationality, intuition is recognized as a mode of cognition that is of

special relevance in strategic thinking and DM (Henden, 2004; Elbanna and Child,
2007a). Some literature suggests that intuitive actions may enable managers to make
rapid and accurate decisions in organizations (Dane and Pratt, 2007). Other literature
contrasts with this view. For example, Spender (1989) argues that intuitive based DM
would rarely achieve the most effective decision. The debate justifies the need for

3
further exploration of the influence of intuition in the SDMP. Intuition has been
interpreted in different ways (Sadler-Smith and Shefy, 2004; Paprika, 2006), and its use
is highly dependent on environmental factors of the organization (Agor, 1989; Haley
and Tan, 1996).

Further debate concerning rationality and intuition suggests that organizations may be
flexible in their style of DM. According to this view, organizations may use a
combination of both rationality and intuitive approaches depending on the situation
which they are facing (Simon, 1987). According to Jonas Salk, the developer of the
polio vaccine, organizations that combine intuition and reason respond in an
evolutionary way to problems (cited in Khatri and Ng, 2000, p.58). Generally, strategic
decisions aim to enhance organizational performance, and in the light of these debates,
Khatri and Ng (2000) propose a number of questions: (1) would a combination of
rational and intuitive approaches produce superior results or would it be better to use
only rational analysis or intuitive synthesis? (2) Is intuition used cautiously and less
often or perhaps employed in combination with rational processes, in some kinds of
environment? While Sauter (1999) questions: (3) Is it possible to employ intuition after
a process of rational assessment has laid a cognitive foundation and provided data and
analysis as the basis for an intuitive process? Since this study examines strategic
decision effectiveness, a further question is asked here: (4) would a combination of
rationality and intuition lead to higher decision effectiveness than using either of them
singly?

Researchers also call for more research to develop insights into the effect of politics on
the SDMP (e.g., Elbanna, 2003; Lawrence et al, 2005). DM involves many interests and
perceptions of problems, depending on the individuals or groups within the
organization, and each individual or group may resort to using their power and
resources to negotiate whatever decisions point towards their own goals (Shen and
Cannella, 2002; Lawrence et al, 2005). Future studies may show how managers can best
neutralize the (negative) impact of tactical politics (Elbanna and Child, 2007a). Perhaps
the negative effect of tactical politics can be reduced through improved mutual trust
(Papadakis and Barwise, 1998), setting of mutually agreed goals, with clear areas of
responsibility, combined with the use of humour (Eisenhardt, 1999), trust and
interpersonal relationships (Elbanna, 2003), and by a group DMP (Workman, 2012). It

4
is important to undertake further studies to show how such political behaviour may be
exhibited in organizations and what organizational features may also play a role.

It is important to identify what environmental conditions influence the SDMP and how
(Atuahene-Gima and Li, 2004; Dane and Pratt, 2007; Goll and Rasheed, 2005; Lindelöf
and Löfsten, 2006). Most studies of SDMPhave explored western economies. There is a
need to investigate the process in less developed countries (Elbanna, 2003). There is an
overwhelming geographical bias‘ of work in the field of strategic management
(Pettigrew et al, 2002, p.8), and Whittington et al (2002) recommend seeking out and
taking account of international diversity, rather than avoiding it (Brouthers et al, 2000).

Different cultural drivers apply in the markets of developing countries compared to

markets of developed countries (Hofstede, 2001; Turner and Trompenaars, 1997). Since
―previous research into the SDMP has produced some inconsistent findings‖ (Elbanna
and Child, 2007a, p.431), this study of SDMP in Libyan Commercial Banks may
contribute to the development of theory.

The banking industry is chosen for this study because of its significance. Banks exist in
hypercompetitive environments and must provide acceptable returns to shareholders or
go out of business. To operate under the objectives of profit maximization, they need to
consider factors influencing SDMP and the effectiveness of strategic decisions (SDs).
Banks were amongst the biggest in Libya companies in terms of the number of
employees and size of capital.

The commercial banking sector is a core part of the Libyan economy, and
modernization efforts have been made in recent years to uplift standards to international
norms, a step which is necessary considering Libya‘s oil related business activities with
the international community. Finally, studying the SDMP in Commercial Banks is
essential in order to enhance the banks‘ ability to manage risks and achieve better
customer orientation (Wang, 2011).

5
1.3 The Aim and Research Questions of the Study

The Aim of the Study

The aim of this research is to explore and analyse the nature of the SDMP in Libyan
Commercial Banks and the impact of environmental and contextual aspects on that
process.

The Research Questions

This study contributes to knowledge concerned with SDMPs in Libyan banks. Three
key research recommendations highlighted in previous studies are:

1. Investigating the SDMP managerial behaviour perspective in relation to the debate

over the growing influence of internal politics (Camillus, 1982; Fredrickson and
Mitchell, 1984; Langley, 1989; Papadakis and Barwise, 1998; Grant, 2003).

2. Integrating different perspectives to develop a more comprehensive SDMP model

(Hitt and Tyler, 1991; Eisenhardt and Zbaracki, 1992; Brouthers et al, 2000; Child et
al, 2003) and

3. Conducting research outside a US or UK setting (Brouthers et al, 2000; Whittington

et al, 2002; Dimitratos et al, 2011).

Three aspects of the SDMP, are (1) the SDMP dimensions (rationality, intuition and
political behaviour); (2) the moderating variables concerning decision-specific,
environmental and organizational factors; and (3) strategic decision effectiveness as an
outcome variable (Dean and Sharfman, 1993b; Dean and Sharfman, 1996; Goll and
Rasheed, 2005; Lindelöf and Lofsten, 2006; Elbanna and Child, 2007a; Dane and Pratt,
2007; Ford et al, 2008).

To improve understanding of SDMPs, scholars have stressed the need to integrate

perspectives when investigating the SDMP (Hitt and Tyler, 1991; Hart and Banbury,
1994; Hough and White, 2003; Elbanna, 2006). To ensure that an appropriate
framework was used in this study of Libyan Commercial Banks, relevant banking
industry-based SDMP literature was also reviewed.

6
The study has considered two categories of SDM research, namely ‗content research‘
and ‗process research‘ (Mori and Munisi, 2009). In this study, the concern is on process,
and factors which have an effect on process. This study focuses on process (and not
implementation) and investigates decisions which are important to decision makers.
How managers affect their organization`s strategic position through the strategic
decisions they make, and the SDMP they adopt, and how they reach their decisions is
central here.

This process research study does not model SDMPs, nor does it identify major
categories of SDs. Rather, this study answers the question of how strategic decisions
(SDs) are made.

To pursue the aim the study adopts an integrative perspective that examines the effects
of context, managerial actions and managers‘ cognition on SDMP and its effectiveness.
Within the context of the aim, the research questions for this study are:

1. What are the key factors influencing the SDMP in Libyan Commercial Banks?

2. What is the relative importance of `rationality`, `intuition`, `political behaviour` in the

SDMP?

3. What is the influence of contextual factors on the process?

4. What is the influence of perceived `decision importance` on the process?

5. What are the key factors influencing SD effectiveness?

1.4 The Research Objectives

With the above questions in mind, the objectives of this study are to:

1. To identify the key factors influencing the SDMP in Libyan Commercial Banks?

2. To explore and the relative importance of `rationality`, `intuition`, `political

behaviour` in the SDMP?

3. To investigate the influence of contextual factors on the process?

4. To investigate the influence of perceived `decision importance` on the process?

5. To explore the key factors influencing SD effectiveness?

7
1.5 The Researcher Journey

The researcher comes from Libya, large country in the Muslim Maghreb region of
North Africa, located on the Mediterranean Sea. Zawarah is her home city, which is
located near Tunisia; this is where the researcher was raised and lived most of her life
before coming to the UK to study.

My family consists of my mother, my father, five sisters and three brothers. The
researcher seeks to develop herself to make her family proud of her and to provide
support to her parents because they supported her through her study under the difficult
conditions of life and family traditions. All that I seek and my achievements are for my
family and especially my mother and father, because I cannot give enough to them for
whatever they have already given me.

When the researcher was offered the chance to return to studying, by the government in
the form of her scholarship for a PhD in UK, she chose the SDMP to be her subject.

She qualified from a business management school which gave her the chance to work
in the Oma bank as a volunteer for a year in customer services. Banking issues attracted
her attention as the bank service was very poor at the time. However when she worked
in the bank she did not have the chance to explore her ideas. Working as a volunteer
opened the door for her to work in different companies in Business Management roles
while she was doing her masters as well. Teaching also formed part of her work
experience, as she worked as a lecturer at the University for three years, teaching
students in the university in the field of strategic management and human resources
management. In addition, she supervised the research of some students during the
period of teaching at the university.

However, although the researcher did work in different places in the banking industry
and in teaching, she always felt that she was missing something, and she felt she had
found that missing item when she got the scholarship to UK.

It was actually challenging to communicate and understand the people at first, because
of the language. When the researcher became familiar with the life style in the UK she
was determined to find work in the UK, to understand the real life and to have real
contact with people. Working as a sales assistant was the way she had the opportunity to

8
have contact with customers and explore business in the UK. This experience gave her
more self-confidence and more capable in about any discussion.

1.5 Structure of the Study

This thesis has eight chapters. Chapter one presents the background of the study,
explaining the importance of the study, the research aim and questions. The structure of
the study is also presented in this chapter.

Chapter two relates to the context of the study. It provides literature on the culture and
geography of Libya and the industrial context (banking) of this study, and the
background of the researcher.

Chapter three reviews literature on SDM. It highlights four perspectives of the SDMP:
the strategic or management choice, decision-specific characteristics, environmental
factors and characteristics of a firm. This chapter suggests some integrative models, and
discusses three dimensions of the SDMP in relation to the synoptic and incremental
political debate. Chapter four presents and justifies the framework of this study, defining
the central elements.

Chapter four presents the research methodology and explains the elements of
methodological concern: reliability and validity of the research. This chapter provides
details of the research steps taken to analyse interview data, leading to the summary of
findings. Methodologically, this study is qualitative, as this suits the exploratory goal
(Yin, 1994; Yin, 2003).

Chapter five presents the analytical results obtained through a process of analysis
explained in chapter five. The results are presented in tables and supported by translated
quotations from the interviews, for each of the five strategic decisions explored in three
Libyan Commercial Banks.

In chapter six, the study results are discussed, showing areas of agreement or
disagreement with previous studies on the themes considered and their sub-themes. The
main study conclusions are summarized in chapter seven, including the theoretical and
managerial implications. This chapter also presents the limitations of the study and
proposes directions for future research.

9
 CHAPTER TWO:

THE LIBYAN CONTEXT AND COMMERCIAL BANKING

SECTOR

2.1 Introduction

This chapter presents an overview of the Libyan context and the commercial banking
sector. Moreover, the information in this chapter is mainly based upon the Banks'
Annual Financial Reports, Economic Bulletin and interviews conducted by the
researcher.

The chapter is divided into three main sections. The first provides a short overview to
Libyan religion and culture. The second looks at The Central Bank of Libya. The third
looks at the commercial banking sector which in turn is divided into three sections as
follows: 2.4.1 Diagnosis of the situation of Libyan Commercial Banks 2.4.2 Reform of
the banking system and 2.4.3 The relationship between Commercial Banks and the
Central Bank of Libya.

Libya is an Arab state located in North Africa, on the southern coast of the
Mediterranean Sea. The population of Libya is about 6.5million. This population is
heavily focused in the North West and the North East coastal districts where the two
most significant cities (Tripoli and Benghazi) are situated. Ethnic groups in Libya are
the Arabs and Berbers who make up about 97% of the population, in addition to about
3% of different origins. The country's population density is one of the lowest in the
world (Economic Bulletin, 2008).

Libya is located in the middle of North Africa with a total area of approximately
1,775,500 sq km (685,524 sq miles), which means that it is the fourth-largest state in
Africa, and over half the size of Western Europe. It also possesses a Mediterranean
coastline of almost 2000 km (1250 miles). 1.5% of the country‘s whole area is the
fertile region and over 90 % is desert or semi-desert. The country is under the influence
of both the Mediterranean climate and the Sahara climate (African Development Bank,
1995).

10
Figure 2.1: Libya political map

During Libyan history, the banking system has gone through a variety of fundamental
changes. The changes to the banking systems relate to supervision and regulation
activities of the banks and the services provided. The existence of banks in Libya began
in the Ottoman era, when financial companies were established to serve economic
activity, which was dominated by agriculture. In 1911 the Ottoman State opened two
branches of the bank in Libya; the first in 1906 in Tripoli and a second in 1911 in
Benghazi. As a preliminary step towards the Italian occupation, the bank of Rome
(Banka De Roma) opened branches in Tripoli and Benghazi in 1907 and another in
Darna in 1912 (Jamal, 2005, translated, p.12)

According to Jamal, The Bank of Napoli set up branches in Tripoli in 1913, followed by
the Bank of Sicily and the Bank of Italy. This allowed Italian immigrants to settle in the
country. During the British and French armed occupation (1943-51), banking activity
was limited to Barclays Bank, which set up two branches, in Tripoli and Benghazi. In
addition, some Italian banks resumed operations (Bank of Rome, Bank of Napoli and
Bank of Sicily). This was due to the authorization given to them on 22/5/1951 (Jamal,
2005, translated, p.15-16).

In 1963, the government issued a ministerial decision that the Libyan government took
over the shares of the foreign banks and their four branches, through nationalization
11
policies. The Libyan investors bought these shares. In 1970, the government issued a
law which fully nationalized the remaining foreign ownership in the Libyan banking
industry, and reorganized the Commercial Banks. In 1979, the private sector in Libya
was virtually abolished and suspended as a result of the government introducing various
socialist-style measures.

In September 1993, the government divested itself of non-profitable companies and

services, and issued Law No. 9 which dealt with both privatization of state assets, and
gave a greater role to the private sector in the economy: this change in government
policy has been considered a huge upheaval to the Libyan economy (Jamal, 2005,
translation, p. 15-16).

2.2 Libyan Religion and Culture

The Islamic religion is one of the most significant aspects of culture. People‘s lives and
their human behavior and attitudes are governed by strong customs and traditions based
mainly on the Islamic religion, which has an effect on the whole of Libyan life,
including its Commercial Banks, and it plays a significant role in the lives of most
Libyan citizens. The Islamic religion and the Arabic language are two elements that
characterize Libyan culture, in comparison with many Arab countries that have more
than one religion, and within Islam more than one tradition. In this context, Hanzaee et
al., (2011) stated that Max Weber (1905) was the first researcher who found that
religion had a significant role in social change.

The Islamic religion permeates all aspects of life; for example, a segment of the
community considers interest rates and commissions charged by Commercial Banks to
be a form of usury, and consequently sinful. Many citizens avoid dealing with
Commercial Banks on this basis. This is supported by Ahmed (2011) who found that
the development of the Libyan stock market was affected by culture and religion.
Moreover Youssef et al., (2011) maintain that of the great religions in the world, Islam
has the greatest effect over all aspects of Muslims‘ lives in their societies, in economic,
cultural and political terms. In this context, Ahmed (2011) reported that there is a
special relationship between commerce and Islam. In addition, there are two links
between economics and Islam: (1) Islam has a set of laws related to taxes, ownership,
charities, transactions, inheritance, financial punishments, and the effect of wealth on

12
proper behaviour, (2) Islam has a relationship to economics through ethics and morality
(Nasrabadi, 2006).

Culture is one of the important factors that may have an effect on Libyan Commercial
Banks, and on their DMP. Culture has also been defined by several authors, such as
Kluckhohn (1951 cited in Barger, 2007, p. 1) who stated that

“Culture consists in patterned ways of thinking, feeling and reacting, acquired

and transmitted mainly by symbols, constituting the distinctive achievements of
human groups, including their embodiments in artefacts; the essential core of
culture consists of traditional (i.e historically derived and selected) ideas and
especially their attached values.”

Hofstede, (2001, p.21) defined culture as “collective programming of the mind; it

manifests itself not only in values, but in more superficial ways: in symbols, heroes, and
rituals”

Hofstede studied how the values of the organizations in a society are affected by
national culture. Thus, fifty countries (including Libya) were examined in terms of the
approach of employees in IBM branches within these countries (Hofstede et al., 2010).
Four dimensions were identified from analysis of national culture; (1) High versus low
power distance, (2) Individualism versus collectivism, (3) Masculinity versus
femininity, (4) Uncertainty avoidance. Hofstede gave a combined result including Libya
as part of what he termed the ‗Arab world` including Egypt, Iraq, Kuwait, Lebanon and
Saud Arabia. These countries together were classed as having high power distance, low
individuality, and being moderate in terms of masculinity. Uncertainty avoidance was
fairly high. The findings suggest that Libyan organizations are likely to be characterised
by deep hierarchies with rigid control structures, and that they are likely to be risk
averse, (Hofstede et al., 2010).

It is the researcher‘s view that the Commercial Banks suffer from several problems (see
section 2.5 and the most important of these problems is a lack of expertise and training
among individual bank employees of the requirements of achieving international
banking standards in Libya, leading to weak banking services. In addition, a large
number of citizens did not clearly understand the importance of the role of Commercial
Banks in economic activity. These failings can be attributed to a general lack of
awareness in the country of the purpose of Commercial Banks among individuals and
their important role in the development of economic activities in the country. Religion
13
and culture have a strong influence on individuals in Libya, which can be found in all
aspects of their life and behavior. Thus, the culture and religion are both variables and
constraints that cannot be controlled by Libyan Commercial Banks, and this may have
an impact on the SDMP in Libyan Commercial Banks, since the success of banks is
related largely to successful communication and interaction with the culture they
operate in.

2.3 The Central Bank of Libya (CBL)

Worldwide, governments are responsible for making rules that are designed to protect
their economies and make them stable. In this context, the role of the Central Bank‘s is
to represent their governments. They are responsible for issuing the rules and guidelines
on how banks should conduct their business. However, the banks adapt these rules after
studying them and assessing the benefits they perceive for their business. Nevertheless,
the Central Bank of Libya (CBL) is the primary regulatory authority. It controls all
banks and banking activities in Libya (Habib, 1975).

The CBL is responsible for Libyan accounts and income and expenses and deposits,
transfer and collection of money locally and externally, and the management of letters
of credit on behalf of clients, it also provides banking services to the secretariats and
public institutions.

In addition, The CBL has the task of managing public debt, which consists of bills and
treasury bonds. The bank purchases and sells these bonds to and from Commercial
Banks, and also pays accrued interest on public debt. The direct role of the Central Bank
of Libya in economic development is to help financial institutions to attract and channel
savings to finance projects, production units and public and private service. The Bank
also contributes to strengthening the financial situation of Libya through public debt
management and management of its reserves of gold and foreign currencies (CBL,
Annual Report, 2008).

Moreover, The bank plays an indirect role in economic development, including

embodying the impact of the activity of Commercial Banks, especially by controlling
the size, type and cost of credit, and also through the adoption of a monetary policy able
to enhance the confidence of local and foreign companies in the strength and stability of
the Libyan dinar in the economy generally, as well as through encouraging domestic

14
savings by individuals, corporate bodies and guidance for investment in productive and
service sectors (CBL, Annual Report, 2008).

2.4 The Libyan Commercial Banks

The Libyan banking industry is the main supporter of Libyan economic activity and
development and it has a vital role in the development and progress of a distinctive
national economy in the public sector. The financial service industry in Libya is
considered a developing industry, since the value of the banks is quite small, and
consists of local banks and no foreign banks.

However, the Commercial Banks include The State-Owned Commercial Banks, Private
Commercial Banks and The National Banking Corporation. In addition there is the
Central Bank of Libya (CBL) which is considered as the coordinator and watchdog of
the sector. The Commercial Banks which can be defined as "institutions routinely
accepts deposits in current accounts, payable on demand, or opens accounts for the
granting of loans and credit facilities, and other banking business” (Banking Law,
2005, p. 31).

Based on the above definition of Commercial Banks, the most important standards,
which the Commercial Banks should consider are maintaining the capital requirements,
maintaining the liquidity determined by Law, maintaining reserve ratio, and adhering to
international banking supervisory standards. Libyan Commercial Banks provide
banking services such as (1) the provision of investment and other services for
investment portfolios, and the provision of investment trustee services, including the
management and investment of funds for a third party, (2) the cashing of cheques made
out to and by customers, (3) services relating to documentary credits, documents for
collection, and letters of credit (Banking Law, 2005, p31-32).

In addition, the Commercial Banks are controlled by the Central Bank of Libya, which
deals with the relationship between them and their co-ordination, and for keeping track
of their activities within the policy framework of the state. ―Each bank has to maintain
reserves of capital by holding back profit before distribution to reach this reserve, in an
amount of not less than 25% of net profits, until the reserve reaches half of the paid-up
capital, and, after that in an amount equal to 10% of net profits until the reserve is equal
to capital‖ (Banking Law, 2005, p 37-38).

15
2.4.1 Diagnosis of the Situation of Libyan Commercial Banks

Libyan Commercial Banks are suffering a series of distortions and deficiencies which
can be summarized in the following points (Bin Guidara, 2005, translation p.1-12).

1- Libyan Commercial Banks are hampered by many of the regulatory and

administrative constraints imposed by the Laws on State-owned enterprises such as
being subject to review by the accounting system and financial control, and the need for
access to many approvals for their development programs.

2- Inadequate performance by the administrative bureaucracy resulting from public

ownership.

3- Libyan Commercial Banks depend on IT systems to conduct their banking

operations, and these are programmed locally with limited efficiency and a lack of
integration. The technology prepared is relatively unsophisticated, which has
contributed to the limited operations provided, and the weak capacity for control and
oversight that these operations afford.

4- There is no communications network that connects the banks and their branches, and
also the Central Bank of Libya, which has led to a reliance on manual or semi-manual
methods in the delivery of data and information, and this in turn, has led to
inefficiencies in the delivery of banking operations.

5- Libyan Commercial Banks rely on traditional payment instruments like money

orders, and there is a lack of infrastructure and systems which prevents banks from
developing tools to pay quick and effectively, such as prepaid cards, credit cards and
ATMs, and this has led to a dependence on the use of paper money and coins and the
slow rate of turnover of money in the economy.

6- The main shortcomings of human resources management are represented in the fact
that the elements of human resources working in the banking sector did not have
sufficient time or real opportunities for training in modern banking technology, English
and banking operations. Although, there were efforts which must be recognized, they
were not utilized optimally.

16
7- Lack of tangible incentives: This impacted negatively on the ability of banks to
attract and retain banking employees who have high skills, and had a negative impact on
the productivity of employees in the banking sector, and their competence and integrity
in the performance of their daily business.

8- Shortcomings in the administrative management: In this respect in the development

of banks, there was no modern management structure to manage the process of
determining job levels and functions.

2.4.2 Reform of the Banking System

Since the beginning of the 21st century, Libya has been implementing a medium-term
economic reform strategy. In recent years, the Central Bank of Libya has carried out
partial liberalization of interest rates; this step is a very important move in using indirect
monetary management. The new banking Law introduced in 2005 was designed to
liberalise the financial market of Libya and allow foreign banks to enter Libya (IMF,
2006).

The banking law (1) 2005 allows the public Commercial Banks to restructure
administration. It also allowed the separation of the functions of the Chairman and
members of the Board of Directors of the banks (for part-time) and the functions of the
Director-General (for full-time), with the number of members of the Council being
between five and seven.

In addition, The new banking law allows the restructuring of public Commercial Banks
in terms of (1) the Commercial Banks determining the financial treatment of their
employees by decisions issued by the boards of Commercial Banks and not being
subject to Law (15) of 1981, (2) the separation of the duties of the chairman and those
of the general managers of banks. In 2006 the Central Bank of Libya allowed
Commercial Banks to take decisions related to the closure of bank branches, either by
transferring them to banking agencies, or merging with each other.

In early 2007, the Commercial Banks took administrative and legal action in order to
improve their portfolios, with respect to the previous debts or new loans and facilities.
Commercial Banks became more independent concerning credit decisions (Economic
Bulletin, 2008).

17
Recent developments in the structure of Commercial Banks include: The banking Law
(1) in 2005: this was one of the greatest impacts on the structure of the banking sector,
requiring that the capital of any commercial bank had to be a minimum of US$ 33.3
million. The Central Bank of Libya could authorise the establishment of banks with
foreign capital and authorise foreign banks to contribute to local banks, which led to the
restructuring of the banking sector in Libya. The main actions included: (1) selling
shares in public banks to foreign strategic partners, (2) the merger in some public banks,
(3) converting some public regional banks to private banks, or integrating other regional
banks with the National banking corporation, (4) permitting foreign strategic partners to
establish new banks in joint ownership with Libyan domestic institutions (Banking
Law, 2005). These changes have increased the commercial pressures on Libyan banks,
and made their operations more subject to competition. Decision makers in these banks
are therefore now faced with an environment with unaccustomed challenges that is
prone to more sudden changes.

2.4.3 The Relationship between the Central Bank and Commercial Banks of Libya

The Libyan Central Bank has been developing the Libyan Commercial Banks and their
banking services service since the early 1990s. In order to develop and update these
services, it included certain provisions related to Libyan Commercial Banks (Banking
Law, 2005, p. 31).

As result, Libyan Commercial Banks have experienced substantial changes designed to

support confidence in the banking system, which has boosted the issuance of new
Banking Laws guaranteeing the independence of both public and private Commercial
Banks (from Interviews).

The Libyan Central Bank has adopted a new expansionary policy to allow Commercial
Banks to take all measures to improve their business, although, there is still policy
control from the Central Bank of Libya. Thus, these banks are free to take any
decisions related to their investments and free to deal with their clients; the law also
protects the confidentiality of customer accounts with banks, and allows banks to
improve their relationships with foreign banks, following discussion with the Libyan
Central Bank (from Interviews).

18
When Commercial Banks work to make any strategic decision, they are required to
spend time obtaining approval from the Central Bank of Libya. This is because they are
under the supervision and influence of the Central Bank, which has the right to issue
laws and legislation for all Libyan banks. The main aim of these procedures by the
Central Bank is to keep banks under close supervision, and this can conflict with the
interests and preferences of the banks. Thus, there is no obvious clarity between the role
of the Central Bank and the interests and preferences of Commercial Banks (from
Interviews).

There is also restructuring of the public Commercial Banks administratively in line with
the provisions of Law (1) 2005, p. 31, including the separation of the functions of the
president and members of the board of directors of the bank (part-time); and the
functions of the director-general (full-time); specifying the number of Board members
including at least five and no more than seven members (Banking Law, 2005, p. 32).

The law provides a Mandate to the boards of Commercial Banks to make decisions
concerning the closure of bank branches or the integration of other branches or
agencies, and their conversion to a bank, while retaining existing branches or agencies,
following the consent of the Libyan Central Bank. Banking Law 1993 allows for the
private ownership of banks, and this is also supported by the new Banking Law 2005,
which also allows foreign banks to open new branches in Libya. In addition, the Central
Bank of Libya allows the merger of public Commercial Banks and contributes to the
processes of privatization of banks, or the sale of portions to foreign banks (joint
ventures). Thus, the Libyan Central Bank is responsible for banking supervision,
without having a direct role in the process of restructuring / privatization, (Banking
Law, 2005).

However, Libyan Commercial Banks suffer from a lack of autonomy, a prerequisite for
the management of Libyan Commercial Banks to achieve their business aims.
Autonomy depends on the powers conferred by Banking Law to Libyan Commercial
Banks. Banks seek more autonomy, if not complete independence from the Central
Bank, (from Interviews). Some implications related to the SDMP in Libyan banks are
revealed in the analysis of several strategic decisions, (see chapter six from Interviews).

19
2.5 Summary

The researcher has provided an overview of the Libyan context and the background of
Libyan religion and culture. An overview of the central bank of Libya, which is the the
primary regulatory authority, has also been given, and its responsibilities for issuing
rules and guidelines to commercial banks have been outlined. These rules and
guidelines regulate the commercial banks, which are the main supporters of Libyan
economic activity and have a vital role in the development and progress of a distinctive
national economy in the public sector. Finely this chapter has provided an overview of
the reform strategy of the banking system; this step is a very important move in the
history of the commercial banks, which have hitherto been suffering a series of
distortions and deficiencies. This chapter is very important for the study in terms of how
banks orient themselves to the banking environment when taking their strategic
decisions.

20
 CHAPTER THREE: LITERATURE REVIEW:

ORGANIZATIONAL DECISION-MAKING

3.1 Introduction

Chapter three, the literature review chapter of this study, presents the researcher‘s pre-
understanding of the SDMP, as evident from the existing literature. The chapter
presents literature that was used as a guide in undertaking this study of SDMP in Libyan
Commercial Banks. While research interest in SDMP is increasing, analysis of the
literature reveals differences in the perspectives shown in past studies. The literature
reviewed in this chapter thus pinpoints the core elements explored in past studies and
the perspectives shown in those studies. The chapter is presented in sections, reflecting
the theoretical aspects of the study of SDMP, given below as:

Section 3.2: Definition of key concepts;

Section 3.3: Managerial behaviour perspective;
Section 3.4: Rational prescriptive models
Section 3.5: Garbage-Can Model
Section 3.6: Decision-specific characteristics
Section 3.7: Organization characteristics
Section 3.8: Environmental factors; and
Section 3.9: Summary.

3.2 Defining Key Concepts of Strategic Decision-Making

3.2.1 Introduction

Given the important role of DM in organizations, many studies have been conducted to
understand the procedures used by decision-makers in the processes of making strategic
decisions. This section presents key concepts which influence the SDMP.

The remainder of the section is broken down as follows: definition of SDM (section
3.2.2), SD makers (section 3.2.3), culture and SDM (section 3.2.4), SD effectiveness
(section 3.2.5), and risk management and SDM (section 3.2.6).

3.2.2 Definitions of Strategic Decision-Making

There are two types of DMPs, namely programmed and un-programmed decisions
(Simon, 1977). Programmed decisions are those that are made in response to routine,

21
repetitive, and well-defined situations that tend to recur frequently. They are also the
kind of decisions that rely on predetermined courses of action, and are usually made by
lower-level personnel.

In contrast, un-programmed decisions are those that confront novel, complex, ill-
defined situations that are rarely repeated and for which there is usually little or no
guidance from past decisions. These are made by higher-level personnel who need to
rely on creativity and judgement to solve the problem opportunity or at hand.

The difference between routine, tactical decisions and SDs is that in the former, the
conditions of the situation and the requirements that the solution has to satisfy are
known and simple. The task merely involves choosing from a few obvious alternatives.
They are decisions that are usually taken with a minimum effort and disturbance to the
organization (Drucker, 2004). On the other hand, strategic decisions are major decisions
that may affect the future existence of the firm, may require considerable analysis, and
for which there is no ―right answer‖. Strategic decisions are defined by Mintzberg et al.
(1976, p. 246) as ―important in terms of the action taken, the resources committed, or
the precedents set". Harrison (1995) notes that strategic decisions are seldom made by
single individuals, and are usually the product of one or more coalitions, or a consensus.
They are often conditioned by organizational values and environmental constraints.
Eisenhardt and Bourgeois (1988, p.737) characterise strategic decisions as those that
frequently, but not inevitably, involve uncertain outcomes and whose resolution occurs
through the exercise of power and politics.

This study focuses on SDs and their significant influence on the business of banks.
Strategic decisions are highly complex and involve a host of dynamic variables
(Harrison and Pelletier, 2001) and a detailed profile of the significance of strategic
decisions would typically include the following:

1. defining the organization‘s relationship to its external environment;

2. encompassing the entire organization;
3. requiring the input from all the primary functional areas in the organization;
4. influencing all the administrative and operational activities throughout the
organization; and
5. ensuring the long-term well-being of the whole organization (Shirley, 1982).

22
3.2.3 Strategic Decision Makers

Two contexts are reviewed in this section: the role of individuals, and of groups in
SDMP. In a recent study, Mori and Munisi (2009) note that usually the decision makers
are at the top level of their organizations. Other contributors on this subject (e.g. Melé,
2010) have found that making strategic decisions was the main and crucial task of
managers in different fields.

Given their core role in SDM, the behaviour of top managers has become an important
area for research, with an influence on the DMP Researchers (e.g., Smith et al., 1994;
Miller et al., 1998; Goll and Rasheed, 2005) have studied how DM is affected by
demographic and cognitive diversity, both of which have effects on decision-makers in
organizations.

The existence of diverse characteristics among groups of decision-makers may help

them to make decisions (Smith et al., 1994). However, Miller et al. (1998) found that
cognitive diversity in terms of extensiveness and comprehensiveness among group DM
in organizations had a negative influence on organizational performance.

Referring to demographics in terms of basic attributes, age, sex, educational level,

length of service, Goll and Rasheed (2005) found that top management demographics
are core predictors of the content and process of strategies. They reported that tenure
and educational level have a significant positive relationship to rational DM.

Strategic decisions in organizations are usually taken by groups rather than individuals,
because group DM has several advantages: for example, the members of group are
diverse, in terms of knowledge, ideas, expertise, skills, which helps to ensure that the
‗right‘ decision is made, (Harrison and Pelletier, 2001; George and Jones, 2008). Other
studies (e.g., Moscovici and Doise, 1994; Brodbeck et al., 2007) show that group DM is
more successful than individual in terms of quality and acceptance of the decision. In
addition, group DM may avoid decision makers making sub-optimal decision, as
individuals often fall victim to bias (Workman, 2012).

23
3.2.4 Organizational Culture and Strategic Decision-Making

Culture may be defend as “(a) a pattern of basic assumptions, (b) invented, discovered,
or developed by a given group, (c) as it learns to cope with its problems of external
adaptation and internal integration, (d) that has worked well enough to be considered
valid and, therefore (e) is to be taught to new members as the (f) correct way to
perceive, think, and feel in relation to those problems..‖ (Schein, 1990, p. 111).

Organizational culture is complex and there is still much debate regarding a definition
of organizational culture (Corley, 2004). ―Organizational culture is a popular but
elusive concept.‖ (Silvester et al., 1999, p.1). Schein (2010, p.73) stated that
organization culture is ―the deeper level of basic assumptions and beliefs that are
shared by members of an organization, which operate unconsciously and are defined in
a basic „taken for granted‟ fashion as an organization's view of itself and its
environment‖. The importance of organizational culture on the DMP is nontrivial and
can greatly influence the decision-maker‘s view.

In an elaborate conceptualisation, Hofstede (1980), considering an organization and its

performance, found organizational culture to include the four elements of attitudes,
behaviours, beliefs and values, Sackmann (1992) views organizational culture as a set
of shared ideologies, beliefs, basic assumptions, core values, and settled understandings.

In recent contributions, further terms have been used to explain organizational culture.
For example, David et al., (2000), in their definition of organizational culture, added
two terms: practices and norms. A more recent study (Twati and Gammack, 2006) used
terms like ―socially built‖, ―traditionally decided‖ and ―holistic‖ in the definition of
organizational culture.

The development of organizational culture depends upon various factors which could be
internal, external or both. Common factors are (i) - the personal and professional
characteristics of people within the organization, (ii) organizational ethics, (iii) the
nature of the employment relationship between a company and its employees, and (iv)
the design of its organizational structure (George and Jones, 2008, p. 567).

The other aspect of the SDMP relates to the national culture of the organization.
Dimitratos et al. (2011) conducted a large-scale survey of 528 small and medium-sized

24
organizations in the USA, UK, Greece and Cyprus. They found that cultural
characteristics greatly influenced the DMP.

The literature suggests two things. First, organizational culture influences the SDMP.
Second, this influence is imparted through the decision makers, who allow
organizational culture to shape their thinking and decision directions. In this study, the
view of organizational culture proposed by Hofstede (1980) is followed, because of its
emphasis on considering an organization in terms of its working and organizational
objectives. The effect of local culture on the organization also influences DMPs
(Dimitratos et al., 2011). The management process sits between the globalised power of
business and the localised power of culture and politics (Branine, 2011). When a
decision-maker knows more about organizational culture and national culture (including
ethical and non-ethical behaviours and practices), the effectiveness of that decision may
be stronger and may have a more positive impact on business.

3.2.5 Strategic Decision Effectiveness

It is also important to consider strategic decision effectiveness in the study of SDM,

since the drive behind SDM is towards corporate success (Bourgeois and Brodwin,
1984; Dean and Sharfman, 1996; Elbanna, 2003).

Strategic decision effectiveness is defined as the extent to which the result is the desired
outcome (Eisenhardt and Zbaracki, 1992). Decision processes affect the success of
decisions, depending on two assumptions, namely (1) different processes lead to
different choices, and (2) different choices lead to different outcomes (Dean and
Sharfman, 1996, pp. 369-370). Some managers may make very poor strategic decisions,
with damaging results for their organizations, while others would make better decisions
under similar circumstances (Bourgeois and Brodwin, 1984).

Dean and Sharfman (1996) noted that SDMPs influence SD effectiveness. Explaining
further the point in Bourgeois and Brodwin (1984), SDs on their own do not lead to SD
effectiveness; rather it is the actions taken (Bourgeois, 1984). This argument supports
the logic that if managers manage strategic decisions well, they can achieve strategic
decision effectiveness for their organizations (Fredrickson, 1985; Elbanna and Child,
2007a). This suggests that SDMP dimensions (Dean and Sharfman, 1996), strategic
choice Hrebiniak and Joyce, 1985), environmental dimensions (Dean and Sharfman,

25
1993b; Goll and Rasheed, 2005), and decision specific dimensions (Elbanna, 2003;
Elbanna and Child, 2007a) must be well managed for strategic decision effectiveness to
be achieved.

Literature about strategic decision effectiveness gives the impression that rationality
influences and moderates strategic decision effectiveness. However, the direction of this
relationship remains debateable (Papadakis, 1998; Rajagopalan et al., 1993; Dean and
Sharfman, 1996; Goll and Rasheed, 1997). Rodrigues and Hickson (1995) argue that in
businesses, successful decisions are more likely to result from DMPs in which adequate
information (dimension of rationality) and adequate means of implementation are
available. That suggestion finds support in Dean and Sharfman (1996) who argue that
procedurally rational decisions are generally oriented towards organizational goals.
Such rational steps are also geared towards detailed analysis of the environmental
circumstances of the organization.

Apart from the study of Khatri and Ng (2000) most of the contributions to the influence
(direct or moderating) of intuition on strategic decision effectiveness are mainly
theoretical. In fact, as recorded in Elbanna (2003), no previous study had examined
whether intuition does indeed have a bearing on strategic decision effectiveness. In their
study of the utility industry, Khatri and Ng (2000) expected that intuitive synthesis
would have a negative relationship with organizational performance.

According to Dean and Sharfman (1996) ―there is limited evidence that SDMPes
influence decision effectiveness‖ (p.368). Because of this, ―the effectiveness of group
decision-making is an increasingly vital concern for organizations‖ (Brodbeck et al.,
2007, p. 459). The present study explores the question of whether the success of
strategic decisions depends on the steps manages use to make them (Hitt and Tyler,
1991; Dean and Sharfman, 1996), and seeks to enhance knowledge concerning the
influence of rationality, intuition and political behaviour on SDMP and strategic
decision effectiveness.

3.2.6 Cost-Risk Management and Strategic Decision-Making

DM in organizations has received much attention, in term of the cost of a decision and
its benefits. When decision-makers follow a rational process, this increases anticipated
benefits and increases the cost of the decision: this cost of the decision is due to an

26
increase in the cost of search and analysis (Elbanna, 2003). In order to reduce the cost of
decision-making, decision-makers search for cost-effective and advanced technology-
based methods of DM (Elamin and Branine, 2008).

A decision perceived as responding to a crisis receives different attention from those

viewed as representing an opportunity, (Jackson and Dutton, 1988; Fredrickson, 1985).
When dealing with decisions involving opportunity, managers display a greater sense of
positivity and such DMPs are relatively easy to accomplish, with higher participation
and contributions from management (Mintzberg et al., 1976). SDM involves dealing
with the uncertainty of expected outcome. An element of risk and its associated cost has
an influence on SDM (Wilson et al., 2010). Because of the risk implications, managers
try to be careful. Managers may be risk averse or risk accepting (Heavey et al., 2009).
How individual managers confront the risk element varies, in other words, there are
variable risk preferences, and ―individuals can be risk averse in certain circumstances
and risk seeking in other circumstances‖ (Miller and Chen, 2004, p.105). Risk-averse
managers may be less attentive to opportunities as they are more sensitive to the
presence of threats in the environment. Meanwhile, risk seeking managers accept a
certain level of threat and seek opportunities in a risky environment (Heavey et al.,
2009).

DM in risky circumstances requires a careful approach. It is reasonable to infer that the

DMP may be less political and intuitive when a decision is crucial to an organization‘s
success. However, Papadakis et al. (1998) found that there was no relationship between
political behaviour and decision importance. Perhaps when managers feel there is much
risk surrounding a decision, they make a dedicated effort to ensure that they avoid risky
negative outcomes. For this reason, they may prefer to use a more rational approach,
rather than political behaviour or intuition.

Decision makers may use quantitative analysis to gauge the chances of success of their
strategic decisions. Harrison (1995) however suggests that decision-makers deal with
the risk involved in DM through behavioural (not quantitative) methods. Improved
environmental risk management improves the market‘s risk perception of the firm
(Agyapong et al., 2011). Investors and analysts take account of improvement in
environmental risk factors when making investments and recommendations (Sharfman
and Fernando, 2008; Heinkel et al., 2001; Mackey et al., 2007). The other element of

27
risk relates to political risk, and all organizations are open to this risk, and multi-
national organizations are more exposed to this risk than local organizations (Branine,
2011). Governmental action or politically motivated events can adversely affect the
long-term profitability or value of an organization. Consideration of political risk in any
DM cannot be ignored, especially where the political system is instable Deresky (2003).

3.3 Managerial Behaviour Perspective of Strategic Decision-Making

3.3.1 Introduction

To improve strategic decisions “two distinct lines of inquiry have emerged: the
rational-normative model (basing strategies on internal and external environmental
factors) and the managerial characteristics model” (Brouthers et al., 2000, p. 863).
This study includes elements of both models. This section focuses on the managerial
characteristics perspective, the internal and external environmental factors perspective is
the focus of section 3.8.

There is a need to extend research by examining the managerial characteristics of

SDMP (Rajagopalan et al., 1993; Brouthers et al., 2000), because culture differs across
nations (Hofstede, 2001), and “managerial attitudes, values, behaviours and efficacy
differ across national cultures” (Newman and Nollen, 1996, p.753).

Managers face challenges to manage their companies to ensure corporate success

(Hambrick et al., 2005). Several studies have examined the role of executive managers
in the SDMP (e.g., Brouthers et al, 2000; Harrison and Pelletier, 2001; Elbanna and
Child, 2007a; Lunenburg, 2010). The performance and diversification of companies are
affected by managerial activities, and this influence may be increasing (Whitley, 1989).
Mintzberg (1973, p. 57) stated that “The manager‟s unique access to information and
special status and authority place him at the central point in the system by which
significant (strategic) organization decisions are made.”

Table 3.1 below pinpoints a number of studies with comments concerning the SDMP
and managerial role. The contexts emphasised in Table 3.1 relate to both sections 3.3.2
and 3.3.3.

28
 Table 3.1: Managerial Characteristics of SDMP: Observations from Past Studies
Studies Context Empirical observations
Examined
Mintzberg et al., Identifying the This study identifies strategic decision- making processes as
(1976) structure and the basic structure that underlines the "unstructured process".
stages of the Its structure is complex and dynamic. 12 elements were used
SDMP to identify this structure containing in three stages. It involved
internal and external factors.
Nutt (1984) Approaches The study examined seventy-eight decisions in health-related
decision makers organizations. Findings: while aspects of the rational model
use to ensure were valid, they did not always follow a simple, cause and
rational effect pattern. Decision makers can follow different types of
management decision process approach: the `off-the shelf approach` in
process which the decision makers use a fast and thorough search to
identify the best solution available, ensuring that it is suitable
to solve the problem or to make the decision; the `historical
process`, in which decision makers derive their ideas from the
prior practice of previous decision-makers to ensure that an
idea has a good chance of success.
Lunenburg DMP Steps The decision process can consist of several steps, (1)
(2010) identifying problems; (2) generating alternatives; (3)
evaluating alternatives; (4) choosing an alternative,
implementing the decision; (5) and evaluating decision
effectiveness.
Rodrigues and Pre-and post- Studied 53 cases of decisions in eight British organizations
Hickson (1995) decision (differences between public and private organizations). The
processes success of DM was connected to the phases of the SDMP.
Findings: private organizations were smoother than public
organizations in terms of DMP. For the private organizations,
key factors for successful decisions were (1) sufficient
information for decision-makers, (2) and also sufficient means
of implementing decisions of organizations. For the public
organizations, the key factors were (1) the correct staff of an
organization participates in making decision; (2) the top
managers do not use their power too much. They conclude
also that there was no clear correlation between the success of
decisions and the features of the processes of making those
decisions. They believe the differences found were due to the
differences in the goals, perceptions, and the people involved
in the decision process in those two sectors.
Nutt (2000) Compared the Examined 376 strategic decisions in public, public and non-
practises used to profit organizations. Six approaches were found: (1) The
uncover decision ―existing solutions approach‖ incorporates ready-made ideas
alternatives by found within the organization; (2) The ―benchmarking
decision makers approach‖ searches for solutions imported from the practices
of individuals and other organizations; (3) The ―integrated
benchmarking approach‖ goes beyond simple benchmarking
by examining more than one organization, and integrating the
best ideas drawn from several sources; (4) The ―search
approach‖ uses an understanding of needs to guide the search
for alternatives; (5) The ―cyclical search approach‖ calls for an
initial search to learn about available ideas; and (6) The
"innovation approach", which provides custom-made
solutions.

Source: The Author - Details collated from past studies.

29
The remainder of the section is partitioned into the following three sub-sections:
rationality (section 3.3.2), political behaviour (section 3.3.3) and intuition (section
3.3.4) of the SDMP.

3.3.2 Rationality and Strategic Decision-Making

Rationality is a concept of significance in many areas of human life; however,

differences lie in defining this concept. People often seek rational means when it helps
them to achieve their objectives, whether these are material or not. Likewise people can
be less than rational when looking for an outcome which is of no personal benefit
(Hechter, 2000).

Rationalisation of a decision might be influenced by organizational dynamics

Schermerhorn et al., 2011). According to that study, there is a difference in
organizations in terms of their size and the kind of industry they are involved in. People
could be thought of as rational in their DM if they know in advance what to expect and
they can measure each outcome according to preference (Gilboa, 2011).

Simon (1957, p.75) argued that “rationality is concerned with the selection of preferred
behaviour alternatives in terms of some system of values whereby the consequences of
behaviour can be evaluated”. Simon noted that a decision which an individual makes in
a rational way should contain the same values, considerations and information which
were involved in reaching this decision. For a group, however, a decision only becomes
rational in an `objective` way if it is in line with the values held by the group, and
includes information which the group considers relevant to the decision. DM taken in an
organization must be rational from the point of view of the individual making the
decision, and must also remain rational when considered by the group (Simon, 1957, p.
243).

The majority of executive managers had sufficient information about a decision; this
suggests that managers would be rational in their SDMPs (March, 2010). The important
role of information is underlined by George and Jones (2008) who assert that `bounded
rationality` results when decision-makers do not have enough, or there is some missing,
information, leading to risky DM. Other contributors (Nielsen, 2011) have argued that
the majority of executive managers are subject to bounded rationality for different
reasons. Because of bounded rationality decision makers are often not able to address all

30
the problems to enable them to make ‗correct‟ decisions. Bounded rationality leads to
an understanding of the central role of organizations in economic life (Simon, 2009).
The correlation between a rational DMP and organizational outcomes has been at the
heart of controversy amongst researchers, with little apparent agreement (Goll and
Rasheed, 1997).

In a stable environment one is able to recognize and analyse the organization‘s critical
variables as part of DM‘s necessary information. For unstable environments, on the
other hand, much of the necessary information is difficult to analyse and/or is
unpredictable, perhaps making an incremental approach more appropriate (Jones et al.,
1992).

There is some empirical evidence that suggests a high positive correlation between the
rationality of DM and organizational performance in an unstable industry. Dean and
Sharfman (1996) found a close correlation between procedural rationality and the
effectiveness of decisions, especially in environments which are unstable rather than
stable. Elbanna and Child (2007a) found a stronger relationship for decisions which are
thought by decision makers to address crises rather than decisions designed to take
advantage of opportunities. Previous studies (e.g., Bourgeois and Eisenhardt, 1988)
have found a positive relationship between levels of rationality and the performance of
an organization in environments which are constantly changing, a position that finds
further support in a number of other studies (e.g., Glick et al., 1993; Miller and Friesen,
1983).

Putting overall findings together, it becomes clear that rational SDM remains unclear
with regard to its relationship with organizational performance or decision
effectiveness. Research is needed to resolve the contradictions among previous studies.
A review of the garbage-can model and rational perspective models is given in sections
3.4 and 3.5 respectively.

3.3.2.1. Rational Economic Theory

The simplest form of rational economic theory is the identification, development and
selection model. In this model, the decision maker is in an environment with known
objectives, and thus able to determine the possible consequences of an action (Simon,
1965). Due to the fact that the decision maker is able to obtain all necessary

31
information, he/she is able to make a decision and take the action that brings about the
maximum value attainable in such a situation. It is important to note that the rational
economic model presumes that all humans and decision-makers are rational beings, and
understand that their behaviour and actions serve some purpose. Consequently, the
DMP based on the rational model is a process that includes decision-makers gathering
information, developing alternatives, and objectively selecting an alternative (Das and
Bing-Sheng, 1999; Eisenhardt and Zbaracki, 1992; Nutt, 1984).

Many critics of the rational model question both the cognitive abilities of decision-
makers and their objectivity. According to Simon (1945), executives and top managers
may be rational beings and may attempt to make their DMP thorough and
comprehensive, but they are not fully able to reach that ideal standard. In a study
criticising the maximization aspect of this rational economic model, Simon (1957)
commented that no matter what the case is, an individual will have limited information,
making the result of all alternatives difficult to determine. Due to this lack of
information, a decision maker is forced to choose between the limited options available,
thus, the decision maker begins to search for satisfaction, and not maximization.

Further criticisms of the rational model are found in Simon (1957), which criticized the
model for its obscurity in modelling the real world. Due to environmental uncertainty,
organizational complexity and the limited cognitive capacities of decision-makers,
maximizing decisions and behaviour becomes impossible. These three factors work
against the rational model. The choices made by decision-makers in an organization can
only be understood as rational behaviour being carried out within an environment of
limited knowledge and opportunities for implementation, known as ‗bounded
rationality.‘

Simon (1993) introduced the concept of a strategy of satisfaction as a more realistic

form of the rational DM model. According to the satisfaction strategy, a decision can be
considered ‗rational‘ as long as it facilitates the attainment of specific goals and
objectives. Simon (1993) described the limited cognitive abilities of the decision-maker
and the uncertainties of the environment as reasons for the decision-maker to search for
alternatives that only satisfy, rather than maximize the valued outcome.

Some critics (e.g., Nilsson and Dalkmann, 2001; Nida, 1997) suggest that the rational
economic model describes DM as the way the process ‗should be‘, rather than how it
32
actually takes place realistically. When decision-makers are evaluating possible
alternatives, they make objections to each option and only opt for the alternative that is
least disagreeable: in other words, it may not be the one with maximum value. In
practice one can conclude that the DMP may be very different from the process
described by the rational economic model (Miller, 1990)

The rationality of making strategic decisions is influenced by many factors, some of

which were briefly mentioned earlier. Other studies have indicated that rationality is
decreased by factors such as environmental threats, external control, and high
uncertainty (Dean and Sharfman, 1992; Eisenhardt and Zbaracki, 1992). To avoid the
effects of such factors and in order to minimize uncertainty decision-makers search for
more data and information.

Although management may produce a rational strategy, decision makers may

sometimes take decisions too quickly, and use incomplete information (Isenberge,
1986). Based on the rational theory, decision-makers should always seek to consider all
of the alternatives, and thereafter choose the solution with maximum value and benefit a
step that requires the decision-makers to spend more time searching for better
alternatives at the cost of additional time and cost (Stroh et al., 2002).

3.3.3 Political Behaviour and Strategic Decision-Making

It was noted in section 3.2 that the strategic decisions are mostly taken by a group of
decision makers who are normally at the top level of the organization. In a group DMP,
most strategic decisions are ultimately political, as strategic decisions involve uncertain
outcomes and conflicting views (Allison, 1971 cited in Eisenhardt and Bourgeois, 1988,
p. 737). It cannot be ignored that executives enhance their power to influence a decision
using political tactics (Gandz and Murray, 1980).

Political considerations in DM assume that each group or DM member only advocates

that decision which is individually favourable to them (Simon and Hayes, 1976). So
every distinct group perceives the process as a competitive arena. This implies a
decision which is connected in particular to the needs and interests of certain specific
decision-makers (Elbanna, 2003).

33
The outcome is decided by those who manage to form or join the most powerful ‗party‘
(Simon and Hayes, 1976; Shen and Cannella, 2002; Lawrence et al., 2005). Hickson et
al., (1986) support Simon and Hayes`s idea, and comment that within an organization,
groups of people can only work towards a limited pool of targets which are closely
related to their own interest and not organizational prescriptions. DM is a process which
involves many different interests, and perceptions of the problem depend on the
individual or groups within the organization. To solve these differences between the
various (competing) parties in their favour, every individual or group will try to use
their power and resources to negotiate whatever decision forwards their own goals
(Simon and Hayes, 1976; Lawrence et al., 2005).

Organizational politics consists mainly of a tendency by individuals to use power in

their efforts to influence and secure their personal interests, or to avoid personally
negative outcomes within the organization (Bozeman et al., 1996 cited in Vigoda-
Gadot et al., 2003). From this perspective, people tend to be viewed as politically
biased; however, even if there are conflicting goals, this does not preclude common
goals such as protecting the welfare of the organization they work in. It is not obvious
that personal and organizational benefits are mutually exclusive. For example, some
people within the organization may prefer growth while others prefer profitability.
These different perspectives may be the result of preferences connected to an
individual‘s position within an organization, and from a difference in ambition and
interests (Allison, 1971).

In the study of politics of SDM, Eisenhardt and Bourgeois (1988) asked the question,
“Why does politics emerge?” Existing literature suggests this may be due to ambition,
rivalry or attempts to take advantage (Schumpeter, 1934), or a natural outgrowth of
conflict between functional units (March, 1962), centralisation (Hage, 1980), or power
imbalances within the top management team (Bachrach and Lawler, 1980 cited in
Eisenhardt and Bourgeois, 1988, p.738). Power imbalance at such levels may prompt
decision makers to show political behaviour and irrationality in the SDMP.

Decisions may be dominated by those individuals with the greatest expertise in the area
of the organisation most affected. Decisions concerning an increase in capital are more
dependent upon financial managers than those involved in marketing, while marketing
managers have more influence on marketing strategy and decisions related to these

34
policies. Nevertheless, both groups still pursue the organization‘s welfare and its
prescribed goal. Das and Bing-Sheng (1999) appear to support the idea of individuality
(different individual or group goals) as well as collectivism (institutional goals). They
suggest that the conflicts created during the political DMPs are, in fact, effective in
producing a combined decision which satisfies several perspectives and intentions.

Studying the SDMP of managers within nine large international corporations, Quinn
(1980) found limited evidence that interest groups influence a decision‘s effectiveness.
In a study conducted eight years later, Eisenhardt and Bourgeois, (1988) found regular
conflict between executives over the most appropriate course of action, and that
executives used identifiably political tactics to gain advantage over others. Some of
these tactics included the formation of coalitions, the withholding of information, and
use of expert consultants.

The influence of political behaviour in DM sometimes imposes negative effects: (1)

―effective decisions must be based on organizational goals‖; (2) ―effective decisions are
based on complete and accurate information about the likely relationship between
choices and outcomes‖; and (3) ―effective decisions are based on recognition and
understanding of environmental constraints‖ (Dean and Sharfman, 1996, p. 375). These
points add substance to the view that political behaviour is displayed for the purpose of
promoting self-interest ―without regard for and even at the expense of organizational
goals‖ (Valle and Witt, 2001, p. 380)

Zanzi and O‘Neill, (2001) point out that organizational politics creates less focus on
organizational goals, a greater restriction on the flow of information, and a deceleration
of DM. Another explanation is provided by Baum (1989), who suggests that when
employees consider personal achievement, and in this way attack co-workers, they
isolate them and they are less likely to feel part of the organization. They may find it
difficult to work alongside their co-workers, making the resolution of issues, and
collaboration within the organization and its units more difficult to achieve. The
negative impact of such politically induced disagreements on achieving strategic
effectiveness has been reported by earlier studies (e.g., Mintzberg et al., 1976; Hickson
et al, 1986). However, the negative impact of political tactics may be reduced through
improved mutual trust or common goals, clear areas of responsibility, and humour
(Elbanna, 2006).

35
This suggests that political behaviour, and the use of power in the SDMP, works against
a democratic culture in organizations. A focus in this study is to find out the extent to
which the use of power is reflected in political behaviour by decision makers in the
DMP.

3.3.4 Intuition and Strategic Decision-Making

The word ‗intuition‘ is derived from the Latin word intuit, that can be described as
‗looking, regarding or knowing from within‘. As Sadler-Smith and Shefy (2004) point
out, the concept ‗intuition‘ has been interpreted in various ways. See Table 3.2

Table 3.2: The Definition of Intuition from Past Studies

Studies Definitions of Intuition
Dane and Pratt ―Like other authors, we view the process of intuition as relating to the domain
(2007, p.40) of the ‗nonconscious‘ information processing system (e.g., Epstein, 1990, 1994,
2002; Kahneman, 2003)‖.
Burke and Miller A cognitive conclusion based on a decision maker‘s previous experience and
(1999, p.82) emotional inputs.
(Shapiro and ―a nonconscious holistic processing mode in which judgments are made with no
Spence,1997, p.64) awareness of the rules of knowledge used for inference and can feel right
despite one‘s inability to articulate the reason‖.
Lieberman (2000, The subjective experience of a mostly nonconscious process – fast, alogical,
p.111) and inaccessible to consciousness – that, depending on the exposure to the
domain or problem space, is capable of accurately extracting probabilistic
contingencies.
(Khatri and Ng, ―holistic perception of reality that transcends rational ways of knowing‖
2000, p. 60)
Myers (2002, p.128- The capacity for direct, immediate knowledge prior to rational analysis.
129)
Kahnemen (2003, ―Thoughts and preferences that come to mind quickly and without much
p.697) reflection‖.
Sinclair and ―as a non-sequential information processing mode, which comprises both
Ashkanasy (2005, cognitive and affective elements and results in direct knowing without any use
P1) of conscious reasoning‖.

Source: Author. Definitions collated from past studies

Paprika (2006) defined intuition as an individual, without any rational process, knowing
or sensing something. Paprika suggests that it can be described as an unconscious
perception about reality, in which intuition does not know how it knows. Other
researchers define it thus: ―intuition is not some mystical or magical thing. It is taking
advantage of the way our brains are designed to be able to think about things
subconsciously and to bring those things to the forefront when needed‖ (Burke and
Miller, 1999, p. 91). They proposed that intuition cannot be accessed by a cognitive

36
process, which involves a course of action, or gives rise to a judgment, as it is an inborn
capacity.

In one of the earliest efforts to address intuition, Bastick (1982) argued that the various
properties of the concept of intuition have made it impossible to give a unitary
definition. Bonabeau (2003, p.118) suggests that ―the subconscious integration of all
the experiences, conditioning, and knowledge of a lifetime, including the cultural and
emotional biases of that lifetime‖, implying that intuition provides a mental pathway to
knowledge and memories which are outside the conscious memories of an individual.

In a stable business environment, decision makers have access to information that

enables them make effective decisions. A rational decision maker who relies on a vast
amount of information will make the most effective decisions when competitive
environments are generally stable (Haley and Tan, 1996). In unstable environments that
are subject to rapid change, strategic decisions bring about new competitive advantages
much more often than in stable ones (Eisenhardt, 1989).

Unstable environments create the following three types of challenges to data analysis:

 the time constraint on collecting the required information,

 the need for larger amounts of data in complex environments, and
 the fact that the reliability of the data decreases as the instability of the
environment increases.

Mental processes which require soft information – non-analytical – may be more

suitable in these unstable environments than the limited or unreliable analytical hard
data (Mintzberg, 1994). Soft information is easier to recognise rather than describe, and
this is a reason why there is quite limited evidence of empirical research in applied
management (Agor, 1989)

The use of intuition in the DMP is more likely under the following conditions: the
environment is highly uncertain; the new emerging trends have minimal earlier patterns
for action and DM; factual information is limited; and that there are possible solutions
to choose from, each having sound factual support (Agor, 1989). According to Harper
(1988), intuition is not needed very often: its use is only necessary, when the data does
not provide a clear solution, or if there is a lack of information.

37
In a later study, it was observed that ―executives who attend to real-time information are
actually developing their intuition‖ and they use intuition to ensure their reaction is
more accurate as well as quick to adapt to changing stimuli (Eisenhardt, 1989). Rowe
and Boulgarides (1992) identified intuition as the most important component of DM and
problem solving, stating that insights based on experience and judgement help managers
to respond quickly, and that these managers are often called intuitive managers. In many
situations decision makers can easily and readily identify the ‗true‘ situation, if their
intuition is based on an analysis of symptoms or deviations.

Intuition perceives all relevant factors which have an impact on a situation and it also
has the ability to sift out irrelevant factors. The matching pattern of (unknown) reasons
for choices is often based on intuition, and it may create an (unwanted) feeling in the
decision maker of ‗not knowing the source of the answer‘.

In a highly ambiguous situation, if a decision-maker needs to make a rapid response to a

situation, intuition may become one of the most powerful tools available to the decision
maker (Janis, 1982). On the other hand, the ability of the mind to perceive and process
information has limits: the human mind cannot deal with problems which include a lot
of factors and variables, and if intuition is the only basis for solving such a problem, an
incorrect or poor solution may result. Decision makers rely on their judgement, not
facts, when knowledge about a situation is limited. Intuition goes together with
rationality, as it is based on extensive experience in analysis, problem solving and
implementation. Some studies have established that sometimes human brains operate in
an irrational manner, while organizations prefer rational DM (Spender, 1989).

Intuition is recognized as a mode of cognition that is of special relevance in strategic

thinking and DM (Henden, 2004). Intuition can be seen as a potential means of helping
managers to make rapid and accurate decisions in organizations (Dane and Pratt, 2007).
Intuition can increase management efficiency by reducing the amount of information
necessary to make a decision, (Isenberg, 1986). However, the findings from that study
should be treated with caution because the focus was on students and general managers,
and the sample size was small. In the opinion of Myers (2002) intuition represents the
rapid apprehension of a DM situation based on past experiences and the reinforcement
associated with these experiences, which is outside the domain of conscious thought.

38
In a recent study, Vasconcelos (2009) offers insights into the way practitioners might
simply want to use intuition in their DMP: managers may become impatient with
repetitive actions or details. As a result, they can leap to conclusions too quickly,
ignoring real-world data available to them. A number of methods have been developed
to manage these tendencies, and they are usually integrated into systems of DM (see for
example Milecová et al., 2010).

Intuition is a highly complex developed way of reasoning that draws upon an

individual‘s experience and learning, and on the facts, patterns, concepts, procedures
and abstractions available to the decision maker from his/her conscious and coconscious
memory (Matzler et al., 2007). The question that arises is, when should intuition be
applied and when should it not (Dane and Pratt, 2007). Intuitive DM can be trusted
only when the following four tests are conducted: (1) the familiarity test, (2) the
feedback test, (3) the measured emotions test, and (4) the independence test (Campbell
and Whitehead, 2010).

The relationship between intuitive synthesis and organizational outcomes has not been
investigated directly (Elbanna, 2006), however, studies have provided indirect evidence
that suggests that in „high-velocity‟ environments intuitive synthesis can have a positive
effect on performance. Executives who used more information and developed more
alternatives were able to make faster decisions compared to anyone else, and their fast
decisions led them to ‗better‘ performance (Eisenhardt, 1989; Judge and Miller, 1991).

Exploring the effects of intuition on organizational SDM outcomes in the sectors of

computing, banking, and utility industries, Khatri and Ng (2000) found that there were
unquestioned assumptions embedded in management about analysis, including an
assumption that decisions stemming from intuitive processes were comparatively
inferior to those which result from reasoned analysis. They found that too many
strategic planning decisions were characterised by intuitive synthesis, but also found
that in an unstable environment organizational performance had a positive correlation
with the use of intuitive synthesis. The study concluded that intuition plays a key role in
DM in organizations; and the use of intuition is linked to experience (Martin and
Hanlon, 2007).

To conclude, literature suggests that intuition is based on the in-depth understanding of

a prevailing situation, and it is a complex phenomenon that derives from the accretion
39
of knowledge in an individual‘s subconscious, and is rooted in experience. There is a
need to expand knowledge on intuition and its influence on SDM. This study aims to
contribute to development of knowledge concerning intuition and SDM.

3.4 Garbage-Can Model

3.4.1 Characteristics of the Garbage-Can Model

The first effort to discuss the garbage-can model in connection with organizational DM
was by Cohen et al. (1972) with the purpose of elaborating and modifying existing
theoretical ideas about organisational DM in order to make sense of certain empirical
observation (Olsen, 2001). It is considered to be the most uncertain and fluid model of
SDM which tends to occur in organisations with high uncertainty. The activation of
strategic decisions depends on participants‘ attention to problems and opportunities, and
on the degree of involvement in a given decision. And those choices are made in
environments which lack complete rationality (Teasley and Harrell, 1996).

In complex environments, problems and solutions cannot be translated easily into a

logical sequence of steps (rational decision-making model). DMPs that do not meet the
circumstances assumed for more classical DM models are called ‗organized anarchies.‘
These usually have three characteristics: The first characteristic is that of preferences,
where the decision-makers may have unclear, inconsistent and/or conflicting
preferences. The second main characteristic concerns a lack of clarity in regards to
technology used in the DMP. Thus, the solutions are found through a process of trial
and error, as opposed to deriving solutions with a clear understanding of variables or
through a developed process. The final characteristic is that of the flexibility of the
participating decision-makers, and the extent to which they have a common goal in
mind.

It has been suggested that because Cohen and his colleagues believed that rational
models lacked the consideration needed for DM in complex and unstable environments,
that the `garbage-can` model is merely a resulting response and/or reaction (Eisenhardt
and Zbaracki, 1992). The garbage-can model, as Olsen (2001) explained, aims to
provide insight to some empirical observations, offering more clarity as well as
modifying the existing theories of organizational DM. It rejects the policy development

40
of the other models, as describing a policy development process would be considered a
‗rational‘ step (Tiernan and Burke, 2002, p .86).

3.4.2 Criticism of the Garbage-Can model

The garbage-can model has been criticised for its appropriateness to SDM. First, its
view of the fluid nature of the DMP has been questioned (Hickson et al, 1986),
especially as to whether the aspects of ambiguity and uncertainty apply to all types of
organizations. Furthermore, Miller (1990) argues that this model is more similar to
political theory than to rational economic theory, suggesting that participation in the
DMP is sometimes more important than the act of implementing a decision itself. DM
takes place in organizations that are characterized by fluid participation and unclear
policy preferences (Cohen et al., 1972). Thus, in their opinion, decision-makers search
for an opportunity to implement their preferred policies, rather than seeking a new
solution. This model may offer little connection between the DMP and the eventual
outcomes of decisions.

3.5 Rational Perspective Models

3.5.1 Introduction

This section presents a brief review of rational perspective models. These models
assume that people have ordered preferences and they make decisions on the basis of
those preferences. There are various theories to model the rational DMP, including:
Utility Theory; Multiple Criteria Decision-making (MCDM) analysis; and the balanced
scorecard (BSC). It is essential to appreciate that these theories represent prescriptions
for how a rational person should decide, rather than descriptions of how a person does
decide in practice. This section is divided in the following four sub-sections: Utility
Theory (section 3.4.2), MCDM (section 3.4.3), BSC (section 3.4.5) and SWOT (section
3.4.6). The following sub-sections provide a definition of each theory, their areas of
application, and limitations.

3.5.2 Utility Theory decision-making

It was Jeremy Bentham (1748-1832) who brought DM to the attention of economic

theorists, speculating about approaches to similar predictions and how people select and
make choices to attain desirable alternatives. According to Bentham, selection depends
41
on the subjective value which the individual ascribes to different choices, and it
assumes that people behave rationally in such a way as to maximize utility or expected
utility (Allen, 1943).

The proponents of expected utility theory have stated that it is a normative theory based
on DM under conditions of uncertainty, and the basic logic is that it is necessary for
decision makers in such conditions to form a set of preferences (Cohen, 1996). Utility
Theory assumes the satisfaction of the decision-makers is based on the choices
presented (Aleskerov and Monjardet, 2002). If the decision rule is consistently applied,
decision makers must follow this rule ―choose the lottery that has the highest expected
utility‖ (Cohen, 1996, p. 1);

Utility theory assumes that a decision in generated from the utility maximisation
principle, based on the ‗satisfaction‘ that the decision achieved. Mathematically, the
satisfaction (utility) that the decision maker gets from selecting a specific choice is
measured by a utility function, "such that: U(x) > U(y), where choice x is preferred over
choice y‖ (Mynatt, 2009, p. 169).

An early study by Samson (1986, p. 312) found that ―utility theory is generally
superior‖ and it provides decision makers with basic information that will assist them in
DM: their result was based on several criteria (1) Range of outcome distribution
considered (2) Quality of theoretical underpinnings, and (3) Quality of insights
produced about the problem.

The theory can be extended to handle uncertainties by defining expected utility,

assuming that a rational person will take decisions which maximise expected utility.
Utility theory is an important research topic in areas such as the scientific theory of
management, theory of economics and decision theory (Belton and Stewart, 2002).
Utility theory suffers from three major limitations: Firstly, it is difficult to specify a
utility function for an organization where a group takes a decision. In this case, each
person may differ in their choice preference: As a result, it becomes extremely difficult
to derive a consistent utility function for the group. Secondly, the utility function
derived at a point of time represents the choice preference only for that one point of
time. Thirdly, it was not easy measure a decision-maker utility function.

42
3.5.3 Multi-criteria Decision-Making

Multi criteria decision-making (MCDM) methods have been developed to overcome the
difficulties in DM that involve a number of decision criteria, and assist as critical
decision tools in political, financial, and scientific situations, and give priority to the
alternative that is the most important. MCDM methods aim ―to help the decision maker
(DM) to make a choice among finite number of alternatives or ranking/sorting finite
number of alternatives in terms of multiple criteria. (Soylu, 2010, p. 525). The problem
decision-makers face with MCDM regarding the preferences they face when there are
multiple alternatives is to select either the ―best‖ alternative, or a small subset of ―good‖
alternatives. An alternative may include various options that could be considered as
conflicting criteria (Soylu, 2010).

Any MCDS method, and its prioritisation principles, can, however, be applied and the
existence of different techniques allows the adaptation of the use of the MCDM method
according to the needs of the decision-maker and the specific planning situation
(Kajanus et al., 2012)

MCDM has been divided into two aspects: (1) Multi-Objective Decision-making (or
MODM). (2) Multi-Attribute Decision-making (or MADM) (Triantaphyllou et al.,
1998); the method of Multi-Objective Decision-making applies to ―decision problems in
which the decision space is continuous‖. Generally, MCDM is based on three important
phases. Initially the organization has to identify alternatives for selection, and criteria,
according to the goals that it looks to achieve.

3.5.4 Balanced Scorecard

The Balanced Scorecard (BSC) is a performance measurement tool that enables

managers to combine financial and operational measures in one report. It is based on the
concept that an organization must manage and evaluate its business from all
perspectives, not just financial. The BSC is the result of a research project by Kaplan
and Norton (1996), who devised a set of measures that give top managers a fast and
comprehensive view of their business.

The BSC provides managers with the instrumentation they need in organizations that
have a high incidence of competition and complex environments; thus, managers must

43
have a sufficient understanding of the environment in order to achieve their goals
(Kaplan and Norton, 1996). The Balanced Scorecard (BSC) was defined by Kaplan and
Norton, (1996) as a tool to

“translate on organization`s mission`s and strategies into a comprehensive set of

performance measures` and provides the framework for strategic, measurement
and management” (p.2)

Moreover, Kaplan and Norton, (1996) discuss the need for a top-to-bottom alignment in
the formulation and implementation of successful corporate strategy. The use of a BSC
within an organization encourages goal congruence, which allows for such an alignment
to take place.

The first main obstacle that is faced when developing and applying a BSC is the choice
of the main non-financial performance indicators that have the highest positive effect on
the performance of the organization, whilst being aligned to the overall goals (Kaplan
and Norton, 1996). Ittner and Larker (2003) suggest that the misuse of nonfinancial
measures can have a negative effect on an organization rather than using financial
indicators alone, as they incur a greater opportunity cost. Cost and complexity of the
reporting of non-financial measures is the significant barrier, which leads to
organizations ignoring the shift in reporting techniques (Blyth, 2005). To successfully
create and implement a BSC, an organization must consider the cause and effect
relationship that links their strategy to performance. The measurement system should
outline the relationships among the objectives to enable management validation within
the four perspectives of BSC.

3.5.5 SWOT Analysis

Strengths, weaknesses, opportunities and threats (SWOT) analysis is considered a vital

tool for SDM, and the technique has been developed in several situations (Feglar et al.,
2006). Moreover, there are unprecedented challenges facing business organizations in
order to carry out their mission, and these challenges are represented by both
opportunities and threats. The formation of a comprehensive picture of the current and
future situation, considering the internal and external environment is central to a SWOT
analysis (Azimi et al., 2011).

44
In SWOT analysis, the strategic factors are the internal and external factors, and these
are the most significant for the future of the company. This analysis collects these
factors into groups of four parts, called SWOT: strengths, weaknesses, opportunities,
and threats: SWOT is a well-known technique for the description of these factors
(Görener, 2012). Generally, organizations seek to apply a particular approach to support
their systems for DM, or for critical decisions, and SWOT analysis is used to analyse
both the internal and external environments. SWOT does not have the means to analyse
the importance of the factors or to assess decision alternatives with respect to the
decision factors (Kangas et al., 2003). Moreover, in business marketing, there is a great
degree of uncertainty. Organizations may use a SWOT analysis to know the Strengths,
Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a
business venture.

3.6 Decision-Specific Characteristics of Strategic Decision-Making

3.6.1 Introduction

The literature pinpoints three core classifications of decision specific factors in SDM.
These include ‗Decision Importance‘ (Elbanna and Child, 2007a; Papadakis et al., 1998;
Dean and Sharfman, 1993), ‗Uncertainty of Decision‘ (Elbanna and Child, 2007a;
Weick et al., 2005; Ford et al, 2008; Kloviene and Gimzauskiene, 2009), and ‗Decision
Motives‘ (Elbanna and Child, 2007b; Elbanna, 2003). These contexts of decision-
specific characteristics of the SDMP are explained next in sections 3.6.2, 3.6.3 and 3.6.4
respectively.

3.6.2 Decision Importance

Decision-making remains the paramount function of managers in any organization

(Brouthers et al., 2000). Managers, as decision makers, influence the extent of success
or failure of their organization (Lyles and Schwenk, 1992). Managers are responsible
for the planning, organizing, controlling and execution of decisions, and decisions have
a varying magnitude of importance (Milliken and Lant, 1991). Managers are most likely
to deal with different decisions in different ways (Milliken and Lant, 1991). Managers

45
may make more committed efforts to ensure the success of a decision, if the decision is
deemed to be very important to the survival of the organization.

The higher the anticipated impact of a decision, the higher the importance that managers
may ascribe to such decisions, and this offers an explanation of DM behaviour,
(Papadakis et al., 1998). The success of the organization may depend on the extent to
which decision-makers make and implement rational decisions (Carter, 1971; Hickson
et al., 1986). DM behaviour may be explained by the importance of the impact of
strategic decisions on organizations. Perhaps decision-makers in organizations follow
more precise rational procedures when decisions have a significant influence on the
subsequent DMP (Papadakis et al., 1998).

There is some degree of disagreement between studies. For example, empirically, while
Papadakis et al., (1998) and Elbanna and Child (2007a) found a positive relationship
between decision importance and procedural rationality, Dean and Sharfman (1993a)
found no relationship. In their study, Hickson et al. (1986) argued that managers are
more likely to demonstrate rationality in decisions if they deem a decision to be very
important for the organization‘s success. However, Langley, (1989) suggests that a
rational approach like analysing data such as cost/benefit, will more likely be used as a
symbolic mechanism by management to display a sense of competency.

3.6.3 Decision Motives

Behavioural science literature suggests that the behavioural DMP of senior management
is impacted by their motives (e.g., Dutton and Jackson, 1987; Fredrickson, 1986).
Motives could be anything, such as a threat, problem, opportunity or a combination of
these.

Elbanna (2003) stated that when the decision-makers view strategic decisions as
addressing crises, there is pressure on procedures during the making of decisions, and
this has a negative effect on organizational performance; as a result managers have less
control over issues. The categorization of the strategic decision either as a threat, crisis
or even an opportunity is important.

Decision-makers may have different ways to deal with each decision, as highlighted in
the views of Elbanna (2003) and supported by Ashmos et al., (1998). The choice of

46
approach could have a significant influence on the subsequent DMP (Mukherji and
Hurtado, 2001; Child et al., 2003). Understanding the situation (motives) could identify
individuals who might participate competently in resolving possible problems or
achieving their motives. Since managers may demonstrate varying behaviour depending
on whether a situation is considered a crisis, threat or opportunity (e.g. Dutton and
Jackson, 1989; Fredrickson, 1985), there is a need to explore how this plays out in
different scenarios. Clear motives are important, and when a strategic decision is
considered very important to the life of an organization, decision-makers may give more
attention to using rational procedures for DM in terms of the collection and analysis of
data (Langley, 1989; Dean and Sharfman, 1993).

Procedural rationality is more often applied to a crisis than to decisions considered

opportunities Mintzberg et al, 1976; Fredrickson, 1985). A study by (Elbanna and
Child, (2007a) supports this view, finding that rationality holds a positive relationship
with effective strategic decisions, and that rationality is stronger for those decisions
perceived as addressing a crisis. Political debates are normally avoided by managers
when they perceive a certain decision as a crisis as opposed to an opportunity. Managers
tend to focus on evidence and facts, sharing and demonstrating greater harmony among
themselves, which subsequently expedites DMP.

3.6.4 Decision Uncertainty

Section 3.2.7 introduced the literature on risk management in SDM. ―Every institution
grows, prospers, or collapses as a result of decisions by its managers‖ (Daft, 2005, p.
306). Non-routine decisions, such as a strategic decision, involve some degree of
uncertainty, and the management of decision uncertainty remains crucial for managers
(Butler, 2002). A core role of organizational risk management is to reduce these risks,
and to decide how to deal with risks and their management. Risk is measured by both
the probability of the event and the seriousness of the consequences, while uncertainty
relates to unknown outcomes of events (Knight, 2002).

The risks and uncertainties can both be measured by the degree of ambiguity in
decisions according to Palmer and Wiseman (1999) while Wilson et al., (2010) state
that risks which organizations face can be measured but cases of uncertainties in
decisions cannot. Decision makers may try to obtain accurate and precise data, in order
to arrive at the `correct` decision with the lowest risk (Wilson et al., 2010).
47
In rational strategies, organizations deal with risks which are associated with decisions
by pursuing a process of calculating and weighing pros and cons (Zinn, 2008).
Uncertainty in organizations can take many forms: Information ambiguity or limitation,
indeterminism of action and political process constraints of organizations will all
contribute towards choice limitation on the part of management (Butler, 2002). Time
and information required have effects on the success of the DMP in organizations, in
terms of reducing the risks which are related to decisions and how to deal with relevant
information. If managers have a lack of information, then they may take longer to make
decisions (Becker, 2001).

Any strategic decision is taken in a context of some risk and uncertainty, and because
decisions concern the future and are based to some extent on incomplete information,
managers cannot always be rational and analytical in making them (Butler, 2002). Other
theorists such as Astley (1984) and Dean and Sharfman (1993a) have stated that in
situations involving uncertainties, rationality is not always the norm followed by
managers during the DMP.

Decision uncertainty, unlike environmental uncertainty, refers to a specific decision,

(Papakadis et al., 1998). Further literature supports the view that uncertainty cannot be
resolved rationally; instead uncertainty necessarily reduces the rationality of a process.
According to Daft and Lengel (1986), high uncertainty involving a decision may lead to
a greater tendency to use intuition.

On the other hand, different researchers argue that decision uncertainty leads to a
greater use of a rational DMPs, resulting in a thorough analysis of data processing
(Bourgeois and Eisenhardt, 1988; Drazin et al., 1999; Ford et al., 2008). Ford et al.
(2008) note that a high degree of decision uncertainty may require that organizations
follow a rational DMP that uses the advantages of sourcing and analysing relevant
information.

Some studies (e.g., Elbanna and Child (2007a; Herremans et al., 2011) suggest the need
for further research concerning decision uncertainty in the SDMP. Elbanna and Child
(2007a) suggest that uncertainty can lead to the politicization of problem formulation.

48
3.7 Firm Characteristics Perspective of Strategic Decision-Making

3.7.1 Introduction

Literature (e.g., Matí as-Reche et al., 2008; Elbanna, 2003; Papadakis et al., 1998)
identifies the need to examine the firm characteristics perspective in the SDMP. This
perspective focuses on the factors within an organization, such as: firm performance,
internal systems, ownership etc. This perspective can be linked to the ‗inertial
perspective‘ as well (Papadakis et al., 1998). The elements of ‗Company Size‘ (section
3.7.2) and ‗Performance‘ (section 3.7.3) are considered below.

3.7.2 Company Size

It is important to examine the influence of company size on SDMPs (Matı´as-Reche et

al., 2008). According to that study, “organizational size can be defined as the scale of
operations of a social system” (p.172). In an organization, the scale of operations can be
measured by the number of people, the value of the assets or the level of expenditure.
“The organizational literature generally defines size in terms of number of people,
either members or employees.” (Matı´as-Reche et al, 2008, p.172). Since most
researchers use the latter, as their research usually involves administrative organizations
rather than voluntary organization (Matı´as-Reche et al, 2008), this conceptualisation is
used.

Organizational size could be seen as an important variable that consistently impacts

managers‘ DMP (Haug, 1997; Fredrickson and Iaquinto, 1989; Katri and Ng, 2000;
Snyman and Drew, 2003). However, for their part, Hart and Banbury (1994) suggest
that the size of a firm significantly impacts the link between the approaches of
management and the outcomes of their organization. An earlier study suggests a
positive relationship between the size of organizations and their level of decentralization
in terms of their DM (Singh, 1986).

There are several variations in the SDMP between large and small organizations
(Elbanna and Child, 2007a). That evidence is supported by several researchers
(Fredrickson 1984; Wally and Baum 1994; Schminke, et al., 2002) who suggest that this
is because large organizations are more complex than small organizations. Matı´as-
Reche et al., (2008) claimed that organizations face many difficulties in order to achieve

49
and grow their business, so they have pressures, and to overcome these pressures,
organizations use all the mechanisms available such as coordination and supervision.

Other studies have stressed the importance of size in the organizational DMP; however,
(Hickson et al, 1986) indicate that there is no convincing evidence linking SDMP and
company size, in contrast to Elbanna and Child (2007b), was found that the rational
DMP has a positive link to organizational size but this positive relationship has a greater
impact on bigger firms than smaller ones.

The managers of smaller firms are more likely to use intuition in their DMPs than their
counterparts in larger organizations (Khatri and Ng, 2000). Supporting this view,
Brouthers et al. (1998) suggest that the managers of smaller organizations use their
intuition more in their DMP than managers of larger firms.

3.7.3 Performance

Performance measurement systems have a significant role in the operations and

business strategy implementations of different companies (Valančienė and
Gimžauskienė, 2007; Kloviene and Gimzauskiene, 2009). The complexity and
multifaceted characteristics of performance have been discussed from different
perspectives (Venkatraman and Ramanujan, 1986; Hambrick et al., 1996). Alarcón and
Bastias (2000) report that company performance can be affected by both the on-going
changes of the industry and the strength of competition between companies in the same
field.

Studies examining firm performance in connection to SDMP have emphasised the need
to examine both financial and non-financial metrics of performance (e.g., Valančienė
and Gimžauskienė, 2007; Husted and Allen, 2007; Kloviene and Gimzauskiene, 2009).
In the literature, the key metrics for measuring financial performance include
profitability, sales level and growth (e.g., Bourgeois and Eisenhardt, 1988; Eisenhardt,
1989; Judge and Miller, 1991; Baum and Wally, 2003; Kono et al, 2010), while the non-
financial performance metrics include social responsibility, customer satisfaction, and
employee welfare (Robins, 2008).

Many researchers have studied the relationship between the SDMPand their operational
performance (Hambrick and Mason, 1984; Daily et al., 2003). Fast SDM positively

50
enhances financial performance (Eisenhardt, 1989; Judge and Miller, 1991; Baum and
Wally, 2003).

In different environments, competitive performance may be enhanced by fast decision

speeds. In order to take advantage of the adoption of new products, firms depend
entirely on the quick decisions that have to be taken (Baum and Wally, 2003).

In the view of Kahneman et al. (1982), making quick decisions may generate a weak
decision, as well as a weak performance, unless extensive information collecting has
been undertaken at the expense of a gain in the speed of a decision. Fredrickson (1984)
lends support to the logic in Kahneman et al. (1982), who found that there was a
positive association between a thorough and well-integrated DMP and high
performance, at least in stable environments. However, the relationship between
comprehensiveness and performance was negative in unstable environments.

The literature on SDM and performance also suggests that SDMPs that involve
rationality seem to yield positive business performance in a munificent environment.
The reason for this is became the risk of uncertainty is reduced and planning can have
an effective outcome (Goll and Rasheed, 2005). Researching the link between
rationality and business performance in high-munificence environments, Goll and
Rasheed (2005) suggest that the relationship is positive and significant. In addition, they
found the opposite with low-munificence environments.

The evidence above (Goll and Rasheed, 2005) contrasts with the findings by
Khandwalla (1973) and Miller and Friesen (1983). As noted in Souitaris and Maestro
(2010), several researchers (e.g., Eisenhardt, 1989; Baum and Wally, 2003) have
studied the relationship between organization performance and unstable and
unanalyzable environments. Revisiting the evidence in those studies, in order to
improve organizational performance, the strategic decisions may be made very quickly,
due to decision-makers using less comprehensive information and data analysis
(Atuahene-Gima and Li, 2004).

One theorist (Smith, 1988) argues that organizations that have adopted a high level of
rational DMP should outperform those that have not, in both large and small
organizations, and Jones (1993) reported higher performance for firms that utilised a
rational DMP.

51
There is a relationship between the financial performance of an organization and the
ability of the company to predict the implications of strategic decisions. The role of
finance in organizations, and its impact on both the DMP and strategic-planning, has
been studied by Kono et al., (2010). Their results indicated that the success of
organizations depend on financial performance; it is considered one of the important
indicators to measure an organizations' success.

3.8 Environmental Factors Perspective of Strategic Decision-Making

3.8.1 Introduction

The environmental determinism perspective (including environmental uncertainty and

environmental hostility) is the focus of this section. The environmental determinism
perspective suggests that the SDMP attempts to adapt to several environmental
conditions and forces, such as threats, crises, opportunities, and other conditions (e.g.,
Starbuck et al., 1976; Atuahene-Gima and Li, 2004; Goll and Rasheed, 2005; Dane and
Pratt, 2007; Lindelöf and Löfsten, 2006).

There is a strong association between a rational DMP and environmental dynamism,

especially when formal planning to obtain high performance is involved (Eisenhardt,
1989; Miller and Friesen, 1983). During periods of environmental constraint, DM has a
higher level of rationality as compared to periods of opportunities from the environment
(Fredrickson, 1985).

Some theorists contend that organizations operating in a stable, undynamic environment

adopt a higher sense of rational DMP than in a hostile environment (Fredrickson, 1985;
Bourgeois and Eisenhardt (1989). Further comments on the subject (e.g., Miller and
Friesen, 1983) argue that the level of planning (which is attributed to rationality) is
higher in environments with low munificence. Similarly Glick et al., (1993) argue that
management working in an environment that is very dynamic normally adopt a rational
DMP. However, Papakadis (1998) found no positive link between hostile environments
and a rational DMP.

Even though the contextualization of an environment can be done by using numerous

variables, environmental munificence and dynamism are important in understanding the
52
SDMP(Castrogiovanni, 1991). A limitation still exists on the number of studies relating
to the effect of environmental dynamism on the SDMP (Goll and Rasheed, 2005).
Following the contextual definition of environmental circumstances above, and justified
by calls made in the above research, this study explores the variables of ‗Environmental
Uncertainty‘ (section 3.8.2) and ‗Environmental Hostility-Munificence‘ (section 3.8.3).

3.8.2 Environmental Uncertainty

Business managers in organizations face increasing challenges as a result of an

uncertain environment, as business managers become more precise in implementing
their tasks, such as SDM and strategic planning. Uncertainty can be reduced by a
significant resource (information) that is provided by information systems (Linn, 2008).
The crucial influence of uncertainty in SDM has recently been stated by Borison and
Hamm, (2010, p.125), who suggest that ―Uncertainty is at the centre of many of the
most important strategic decisions made by private businesses and public agencies.‖

Environmental uncertainty has attracted a lot of researchers into the study of the SDMP
(Borison and Hamm, 2010; Vecchiato, 2012). A rational DMP may be used in a stable
environment, and incremental political behaviour or intuition may be used in an
unstable environment (Fredrickson, 1983). This choice of approaches may be
reasonable in an environment with high munificence, and accessibility to accurate and
timely sensitive information.

Firms respond proactively to match environmental conditions (Covin and Slevin, 1989;
Lindelöf and Löfsten, 2006; Sharfman and Shaft, 2011). The examination of
environmental uncertainty should result in the manifestation of the firm‘s most basic
strategic direction and centre on how the firm will reach the market. For that goal, the
core environmental dynamism factors of customer preferences and competitors should
be investigated (Lindelöf and Löfsten, 2006).

In a hostile business environment, external forces interact negatively with the business
performance of organizations. This means that there is usually a feeling of unease and a
need to devise appropriate strategic actions to adapt the firm to the situation (Edelstein,
1992). When the power of buyers increases and suppliers realise that they have to offer
better terms and conditions to attract customers, and when there is a significant increase

53
in the number of suppliers, especially if the regulatory bodies are oppressive, the
environment can become very hostile (Zahra et al., 1997).

However, Lindelöf and Löfsten (2006) stated that organizations usually adapt to
environmental circumstances, especially in a hostile environment. For example, an
increase in the level of competition creates more pressure on the company, and this
pressure can contribute to companies implementing their policies more quickly,
especially companies which work in high level technology environments (Newkirk and
Lederer, 2007).

Some researchers argue that environmental uncertainty has a moderating impact on the
relationship between the SDMPand the performance of an organization (e.g., Goll and
Rasheed, 1997; Fredrickson, 1984; Bourgeois and Eisenhardt, 1988). Other researchers
disagree with that view (e.g., Elbanna and Child, 2007b; Goll and Rasheed (1997).
These studies support the notion that environmental uncertainties do not have a
moderating effect on that relationship: these different findings could be explained by
variations in the constructs used in other research (Elbanna and Child, 2007b). The
emphasis placed on the conceptualisation of this construct by previous studies may be a
cause for the differences in findings.

The debate about the moderating/non-moderating influence of environment uncertainty

is ever increasing: Fredrickson and Iaquinto, (1989) argue that organizations with
operations in munificent environments adopt a rational SDMP. Disagreeing with that
logic, Bourgeois and Eisenhardt (1988) suggest that highly dynamic environments cause
successful firms to adopt a rational DMP, and such rational processes generate greater
operational gains.

The findings in Schwenk and Shrader (1993) add to the confusing picture about the
moderating role of environmental uncertainty. According to them, environmental
heterogeneity affects the SDMP, especially with regard to rationality, and results in
greater use of cognitive processes that simplify the decision. When dealing with
external challenges which are normally combined with complexity, management tend to
minimise their cognitive effort by creating ‗short cuts‘ in their thinking, uniting around
intuition or routine.

54
Findings of Frese et al., (2000), suggest that a rational DMP has a positive relationship
with firm performance in less chaotic environments, while Dean and Scharfman (1996)
found a negative relationship with performance in unstable environments. Moreover,
Papadakis et al. (1998) also reported persuasive evidence in insufficient. To explain the
manner in which the strategic decision process is shaped by environmental forces, it
becomes crucial to analyse how managers process and interpret these developments.
With respect to their environment, a crucial issue in analysing mangers‘ behaviour is
their ability to process information, and their risk-taking propensity. It is imperative to
state that managers react differently to various environmental stimuli. This could be
explained as a difference in their cognitive potential to process data, according to
Rajagopalan et al. (1993)

“uncertain environments that are also munificent (e.g. high growth industries in
initial stages of industry evolution) are very different from environments that are
far less munificent (e.g. mature industries with declining demand or increasing
competition). Hence, the performance effects of comprehensiveness are likely to
be different across these environments.” (p. 359)

More research is required to improve understanding of the influence of environmental

uncertainty on the SDMP on the one hand, and the moderating influence concerning the
relationship to decision effectiveness and performance (Goll and Rasheed, 2005).

3.8.3 Environmental Hostility-Munificence

Hostility implies a business environment full of constraints, risky, and with limitations
of available resources, and a high degree of competition in the external and prevailing
environment, with unstable market circumstances (Newkirk and Lederer, 2007). The
manager‘s range of action is constrained by the environment an organization operates
in. Environmental hostility-munificence remains an important characteristic that exerts
an impact on managers‘ behavior and helps in the understanding of the
SDMP(Catrogiovannai, 1991; Kreiser et al, 2002; Baum and Wally, 2003; Goll and
Rasheed, 2005; Elbanna, 2003).

Three features are identified for measuring environmental hostility-munificence, namely

capacity, growth/decline, and opportunity/threat. In this conceptualization
(Catrogiovannai, 1991, cited in Goll and Rasheed, 2005, p.1007), capacity is
represented as the level of information which is available to the organization;
growth/decline is represented in changes in the productive capacity of the organization;
55
opportunity/threat is represented as how to extend capacity but not to exploit it (e.g.,
Catrogiovannai, 1991; Zahra and Covin, 1995; Kreiser et al, 2002; Goll and Rasheed,
2005; Newkirk and Lederer, 2007).

In their study of top management demographics, organizational performance, rational

DM, and the munificence of environments, Goll and Rasheed (2005) found that the
munificence of an environment acts as a moderator on the relationship between DM and
organizational performance. Kreiser et al., (2002) researched the relationship between
environmental conditions and the SDMP in small and medium size enterprises. Their
study, which included 1,307 organizations in eight countries, found that environmental
conditions had an influence on the SDMP.

Contingency theory provides a key construct for businesses operating within a given
environment. According to this theory, there is certainly no single strategy that best
meets the needs of all organizations (Miller and Friesen, 1983). Therefore it advocates
the adaptation of an organizational strategy that meets the needs of individual business
operations in respect to their environmental conditions (Gardner et al., 2000). These
arguments justify the need for further investigation, because the needs of organizations
differ, dependent also on their operational environment, as there is a suggested link
between an organization‘s performance and the hostility of its environment (Zahra and
Garvis, 2000), and their results showed profits and growth in revenue, despite the
company‘s performance facing a hostility in the international environment. Moreover,
variation of strategy to suit environmental hostility or munificence is crucial for
organizational success (Slevin and Covin, 1990). The measurement of the munificence
of an environment in relation to SDM is necessary (Castrogiovanni, 1991), and this
study aims to contribute to filling a research gap by doing so in a Libyan context.

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3.9 Conceptual Model

3.9.1 Introduction

The theoretical realm of the model for this study is grounded on two major research
studies: the first identifies a need to develop a model for strategic managers (decision
makers), to enable them to achieve success in an organization (Ford et al., 2008). The
second stresses the need to develop and test a more integrated model of the SDMP
(Brouthers et al., 2000; Elbanna and Child, 2007a,b).

The next section (4.2) considers the key factors influencing the SDMP and presents
their relationship in the form of a conceptual model. The development of this conceptual
model will fulfil one of the aims of this study, to explore and critically analyse the
nature of the SDMP in Libyan Commercial Banks and the impact of environmental and
contextual aspects on that process.

3.9.2 The Conceptual Model

The integrative model for this study is presented in Figure 3.1. Based on the research
aim specified in chapter 1, desk research was undertaken to have a pre-understanding of
SDM and the core elements that relate to the SDMP. This model builds on the literature
review presented in Chapter 3, concerning the relevant contexts that formed the
background knowledge for this model.

Figure 3.1, based on the literature review, contains the following key components:
1. External Environmental Characteristics (which include Environmental
Uncertainty, and Environmental Munificence (Hostility),
2. Internal Firm Characteristics (which include Company Size, and Firm
Performance),
3. Strategic Decision-Specific Characteristics (which include Decision Importance,
Decision Uncertainty, and Decision Motive),
4. SDMP Dimensions (which include Rationality, Intuition, and Political
Behaviour), and
5. Strategic Decision Effectiveness.
These components are explored in the Libyan Commercial Banks. The conceptual
model is presented in Figure 3.1, and justified in section 3.9.3.

57
Figure 3.1: The Conceptual Model for studying SDMP in Libyan Commercial Banks

External Environment

Internal Factors Process Specific Dimensions

Organizational

Size/ performance Rationality

Senior Staff
Strategic Decision
Culture
Effectiveness
Intuition

Decision Specific

Importance
Uncertainties Political Behaviour
Motives

Direct Influences

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3.9.3 The Justification of the Conceptual Model

Strategic DM is a core activity in organizations (Brouthers et al, 2000; Mintzberg, 1989)

and there is need to explore how this is done in organizations (Ford et al, 2008).
Moreover, doing this is necessary because organizations have their own culture and
established values, and these organizational culture features influence the strategic DM
orientation of managers (decision makers) (George and Jones, 2008; Eisenhardt and
Zbaracki, 1992; Schein, 1990).

Developing countries like Libya have been largely ignored in the examination of SDM.
Most studies have focused on the US and countries in Europe. In addition to
organizational culture (George and Jones, 2008; Alavi et al., 2006), national culture
(Hofstede, 1994) may influence how strategic decisions are made in organizations. In
this study the conceptual model is applied in the Libyan Commercial Banking context.

The conceptual model in Figure 4.1 combines several perspectives. Exploring each
individual perspective is important, combining them in a study is also important,
because (a) each perspective explains only a part of the process (Eisenhardt and
Zbaracki, 1992; Hitt and Tyler, 1991; Rajagopalan, et al, 1993), and (b) this will allow
for the interactions between them to be highlighted (Brouthers et al, 2000).

It is necessary to explore the influence of external environmental characteristics on the

SDMP (Latuha, 2010); Kloviene and Gimzauskiene, 2009; Kreiser et al, 2002). The
external environment plays a vital role in making strategic decisions. Under the same
circumstances, the external environment may result in different strategic decisions in
the US, Europe and Libya.

Alongside the external environment, there is also a need to explore the internal
characteristics of a firm‘s SDMP (Mathias-Reche et al, 2008; Elbanna, 2003; Papadakis
et al, 1998). Understanding the impact of organizational culture on a decision maker‘s
perception and decision direction may have an effect on the organization‘s performance.

Having assessed external and internal influences, the study will also explore the factors
of SDM, which are decision specific (Elbanna and Child, 2007; Papadakis et al, 1998;
Ford et al, 2008; Kloviene and Gimzauskiene, 2009).

59
Finally, it is necessary to explore organizational performance and the effectiveness of
the implemented strategic decision (Rajagopalan et al, 1997; Kloviene and
Gimzauskiene, 2009; Valanciene and Gimzauskiene, 2007; Husted and Allen, 2007;
Kono et al, 2010; Ramos-Garza et al, 2011; Baum and Wally, 2003).

3.10 Summary

In this chapter, the outcome of desk research has been presented, reviewing literature
that forms the pre-understanding of the researcher concerning the context of this study.
Five key literature realms were reviewed to provide the theoretical background on
which this study is grounded.

The first core section of this chapter reviewed literature on core concepts in the study of
SDMP. In addition to defining SDM, that section also explained, amongst others,
‗Decision makers and Group DM ‘, ‗Organizational Culture and SDM ‘, Democracy
and Distribution of Power in Organizations and SD Effectiveness, and different types of
rational prescriptive models were reviewed. Following that, the managerial elements
perspective of SDM was explained in the second major section. Two main dimensions
were covered in the literature reviewed in that section, namely the decision-specific
perspective and the managerial behaviour perspective. These contexts were reviewed in
order to explore the gap in research in this area which has provided a foundation for this
study.

In the third core section, the literature on ‗Environmental Uncertainty‘ and

‗Environmental Hostility-Munificence‘ was reviewed. The final core section presented
literature on the ‗Firm Characteristics Perspective of SDM ‘, explaining the elements of
‗Company Size‘ and ‗Performance‘.

The fourth core section introduced and justified the conceptual model for this study.
The key components of the study are well specified in the model. This model presents
the pre-understanding of the researcher, based on existing literature about the SDMP.

To apply the model to the Libyan Commercial Banks context, the methodological
approach used to explore Figure 3.1 is explained in chapter 4.

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 CHAPTER FOUR
RESEARCH METHODOLOGY AND DATA COLLECTION

4.1 Research Methodology and Methods

4.1.1 Introduction

This section describes the research methodology that will be used to explore and
analyse the data necessary to address the research questions, and also review the main
research designs that are available for use in social science research, and explain the
choice of methodology that this researcher has made. Issues of validity and reliability of
the methods in question and how they impinge upon this research are discussed.

Based on the data collected in this study, table 4.1 summarises information about the
strategic decision case studies which were explored in the three banks, their objectives,
and a brief description of their important process activities.

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Table 4.1. list of decisions
Decisions Banks Description of the decision

Establishme Bank (A) The development of a new technology system was represented in automated
nt of new clearing house, real time gross settlement, and automated check processing,
technology which contributed to diversification, acceleration and the accuracy of various
financial and banking services. A new technology system contributes to the
decision
development of financial and other economic sectors, and also increases the
benefits of the large developments of information technologies and
improving the banking activity environment and Commercial Banks.

―… the bank had prepared a thorough plan to study the programme on 4th
September 2004 with the help of The Central Bank of Libya and the
Commercial Banks and consultation companies..... Our bank and these
banks formed a committee from all participating banks their aim was to
study all aspects of the programme and methods needed to work it.” P1-A
Islamic Bank (A) The Islamic Murabaha decision was one of the most important strategic
Murabaha decisions recently taken and it was issued on 25th May 2008. Murabaha
Decision means that the bank buys and owns certain products , for example ( cars,
electrical appliances, electronic devices) then the bank sells them after
adding all costs in order to buy it, with a reasonable profit that the two
parties agreed about and also with the agreement of all other conditions of
payment. The idea of the new product decision came at first because of the
Islamic Sharia Law. This new product (Murabaha) was well received by
much of Libyan society which led a lot of Libyans to start paying back their
debts and cover their financial commitments to the bank in the form of
traditional credit.
“……..in my opinion the main problem that the bank has is that the majority
of Libyan people believe that interest and the commission charged by banks
are a kind of usury, which is forbidden in Islam. As a result, people avoid
dealing with Commercial Banks, and according to this problem this decision
was suggested to be taken from the board of directors of the bank.‖ P4-A
Training Bank (B) The training decision represents one of the important decisions taken by the
Decision bank and available to the employees for a very long period. The bank started
in 2007 the rehabilitation of workers for the training courses in all
disciplines. The aims of the training decision was to improve the
performance of bank employees‘ and enable them to achieve the best work,
and training and qualification of bank employees‘ in order to create national
cadres able to run and manage the bank. Development of the employees‘
banks to make them able to keep pace with global developments in the
banking industry.
“.we were suffering from the lack of staff; those who meet the criteria for
banking and this are affecting the performance of the bank. For example, the
mistreatment of customers and the failure to provide the required service at
the suitable time resulted from the lack of ability to introduce new products
or new technology to cope with banking developments. Therefore, we did our
best to develop plans and programs for the rehabilitation of the workers. We
have prepared, for example, training courses in many field, such as banking
businesses, financial, economical and others.” (P5-B)
Islamic Bank (B) The Islamic Murabaha decision was the most important decision taken
Murabaha recently by the bank, and it was issued on 2008. The Islamic Murabaha
Decision decision was a product of new banking business. It was approved to replace
the interest system accompanied by developments in society to establish
investment and develop projects.
―...Islamic Murabaha decision was one of the most important decisions to
have an impact on the Libyan banking markets. The bank was suffering the
problem of individuals refusing to deal with interest since it contradicts with

62
 the Islamic Sharia. The bank has made this decision to solve this problem...”
P7-B
―… this decision was considered in a master study prepared for this
purpose, which was suggested to solve the bank‟s problem represented by
people refusing to deal with interest. They do not want interest and ask to
buy products from the bank but directly dealing with the bank according to
the Islamic Sharia. The solution was Islamic Murabaha (services consistent
with Sharia) which was submitted to administrative committee of the bank
and approved by the Central Bank of Libya; therefore this decision was
made…” P8-B
Decision Bank (C) The bank, during the past few years, put operation training and rehabilitation
five: at the forefront, carrying many of the programs of training and
Training familiarization tours in all areas related to banking, and in conjunction with
the ongoing economic reforms at the level of the financial sector and
Decision
monetary policy. The bank took this decision in 2006 based on the
requirements of banking reform and orientations by the Central Bank of
Libya from the need to work to develop Libyan banks and an increase in the
reform of economic activities. The decision was made due to the bank
suffering from several problems such as (1) poor banking services provided
to the customer, (2) mistreatment of customers by the employees, (3) the
lack of trained and qualified staff who lack training techniques, (4) not
keeping up with the latest modern technologies in the training of employees.

4.1.2 Research Philosophy

In research philosophy ‗all human beings are guided by highly abstract principles‘
(Bateson, 1972, cited in Ritzer, 2004, p.37). These principles relate to the underlying
ontology, the nature of reality, epistemology, the connection among the inquirer and the
known, and methodology, and concern how we know the world and increase
understanding (Lincoln and Guba, 2000). Silverman (2003, p.2) contends that
‗methodology is a general approach to studying a research topic‘. The methodology
establishes an approach to addressing the research questions and is strengthened by the
method or methods.

In research philosophy a distinction is often drawn between the term ‗positivism‘ and
‗interpretivism‘ (Bryman and Bell, 2007). The term ‗positivism‘ describes the approach
that is predominant in the physical sciences and assumes that science measures (usually
quantitatively) independent facts about a single apprehensible reality (Guba and
Lincoln, 1994). Furthermore, Easterby-Smith et al., (2002) argue that the concept of
positivism implies that the social world can be understood through objective measures,
instead of being inferred subjectively through sensation or intuition.

Contrary to positivism, interpretivism seeks to understand phenomena as social realities

with form the social life-world (Crotty, 1998). In the view of Bryman and Bell (2007)
interpretivists believe that: ―the subject matter of the social sciences—people and their
63
institutions—is fundamentally different from that of the natural sciences. The study of
the social world therefore requires a different logic of research procedure, (p. 17).”

A social constructivist philosophy for conducting research was selected as the most
suitable philosophy to address the research questions of this exploratory study because
it recognizes the relevance of culture and context. This approach assumes that 'reality' is
a social construct rooted in interactions between people involved in some joint activity,
and that 'knowledge' is socially and culturally constructed. An inductive approach was
selected for the study because it seeks to understand phenomena through meaning,
based on an understanding of experience from the perspective of individuals. The
approach recognises the complexity of the process of strategic decision making and
identifies the importance of accepting different individual circumstances and individual
cases (Saunders, 2007).

Thus, this approach was more appropriate because it used a more personal process
(Carson et al., 2001), and this allowed the researcher to analyse the various
interpretations that actors related to a particular phenomenon give to their experiences
(Easterby-Smith et al., 2002), and focus on understanding what was happening in a
given social context.

The current study focused on the understanding of social phenomena of the Libyan
commercial banks focusing on senior managers, viewing the phenomena from their
point of view. The focus is based on the researcher‘s interpretation of the participants‘
views (Bryman and Bell, 2007). To achieve this the researcher needed to have face-to-
face contact with the sample of the study in order to enable her to obtain as much
information as possible, to understand the complex process of DM, and how and why
the decisions were made, and what the factors were that had an impact on the SDMP.
For this purpose, the researcher chose three methods of collecting information, which
were: personal interviews, documents, and observations, in order to achieve multiple
realities from different perspectives, and address the research questions. This indicated
that the study needed to be both exploratory and inductive in nature, following a social
constructivist philosophy (Lincoln and Guba, 1985).

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4.1.3 Research Design

The nature of the research can be determined by the research strategy. This research
focuses on the SDMP in Libyan Commercial Banks. The research design can be defined
as “a master plan specifying the methods and procedures for collecting and analysing
the needed information” and as a “framework of the research plan of action”
(Zikmund, 1997, p. 40).

The researcher considered some options in selecting an appropriate and effective

approach to the collection and analysis of data, to achieve the aim of the research, and
also ensure that the data contributed to addressing the research questions. One of the
main functions of research design is to ensure that the research instrument provides
appropriate direction to the collection and analysis of data (Hussey and Hussey, 1997).

In the preliminary stage of any research, researchers need to select a specific research
design for data collection and analysis (Saunders et al., 2003). A research design is a
plan or framework for the study, which guides the researcher in collecting and analysing
the data, and completing the study. There is also a need to select the most appropriate
and effective data collection approaches. There are a number of different research
approaches available but unfortunately, there is no simple classification system,
(Cooper and Schindler, 2001). For example, translation has great importance in the
design of the current research because this research was conducted in another culture
with a different language (i.e. Arabic) from the English language in which the
questionnaire was originally constructed. The research questions were taken into
consideration to develop an appropriate strategy for data collection.

As a result of investigations within the literature on methodology and a review of the

SDMP, along with the literature review, a research design was chosen. The design of
this research is based on a qualitative approach. The researcher organized the research
into four stages. The first stage is the literature review, the second stage is qualitative
research, and the third stage is data analysis of the research, while the fourth stage
develops a conceptual framework to explain the findings.

4.1.4 Rationale for Choosing Qualitative Research

Qualitative research defined as “an approach to the study of the social world which
seeks to describe and analyse the culture and behaviour of humans and their groups
65
from the point of view of those being studied.”Bryman (1988, p. 46). Several authors
(Rudestam and Newton, 2001; Johnson and Onwuegbuzic, 2004) have reported that
qualitative research has several advantages, e.g. providing large quantities of data such
as words and ideas. On the other hand, they have also stated that qualitative research has
disadvantages; it is difficult to analyse, the process of collecting data is time consuming,
it may be costly, and there are difficulties interpreting the evidence. Ghauri and
Gronhaugh, (2005) stated that a qualitative method is better for inductive and
exploratory research. It can help researchers to build hypotheses and explanations. It is
also more helpful when research objectives need insight into a phenomenon – as is the
case in this study. The researcher needed to have direct contact with the sample of the
study in order to enable her to combine as much information as possible, to understand
the process of making a particular strategic decision, and address the questions driving
the research. Several studies in strategic management and business have applied a
qualitative research approach such as Miller, 1997; Miller, 1990; Hickson et al., 2003;
Miller et al., 2004).

It has been argued that qualitative approaches provide a more holistic picture of the
management of organizations. Pettigrew (1985, p 22) stated that studies of strategic
management should adopt a contextualised approach allowing the researcher to view
“the emergent situation and holistic features of an organization or a process in its
context, rather than divide the world into limited sets of dependent and independent
variables isolated from their context”. Marshall and Rossman, 1989 stated that
qualitative methodology involves the different viewpoints of respondents, allowing the
researcher to understand more about the phenomenon of SDMP. The exploratory nature
of the current study required a qualitative method for these reasons, especially when the
research questions are: ―what‖, ―how‖, or ―why‖ (Spencer et al., 2003; Yin 2003;
Bryman and Bell, 2007).

4.1.5 Qualitative Approach -Strengths and Limitations.

Adopting a qualitative approach in this thesis has both strengths and weaknesses. One
of the main strengths of this approach is its depth and the amount of detail it can
generate. Several different research methods, discussed later in this chapter, were used
to collect data, all of which are associated with applying a qualitative approach,
including (interviews, observation, and documentation). Contrary to a research method
such as survey, which would allow for a superficial view, these approaches enabled the
66
researcher to look at the subject under investigation in more depth and allowed her to
collect a large amount of data. The findings of qualitative research may not be
generalised beyond a particular case (Bryman, 1994). However, it sometimes happens
that qualitative research is used in studies which are similar in a particular area of
research investigation, and the two sets of results may appear discordant.

Three important strengths of qualitative research were highlighted by Silverman (2005):

(1) It takes account of local context; it often studies ordinary events which happen in the
natural setting. (2) It provides a complex and rich understanding. (3) It happens over a
period of time, which also allows for an understanding of causality and history.
Qualitative research is specifically related to an interpretive and relativist position and
one which is reluctant to espouse the scientific ideal of transferable, objective
knowledge from the research.

The essential features of qualitative research are thus ―the recognition and analysis of
different perspectives; the researchers` reflections on their research as part of the
process of knowledge production; and the variety of approaches and methods‖ (Flick,
2006, p. 14). Denzin and Lincoln, (2000, p. 3) add that this kind of qualitative research
―involves the studied use and collection of a variety of empirical materials – case study;
personal experience; introspection; life story; interview; artefacts; cultural texts and
productions; observational, historical, interactional, and visual texts – that describe
routine and problematic moments and meanings in individuals lives‖.

In addition, Denzin and Lincoln (2000) state that when using a qualitative method, it is
often difficult to validate outcomes and evidence may be accepted with a certain
measure of trust. This disadvantage has been addressed in several studies, often quite
innovatively, by using different sources of data in order to verify results, e.g. the use of
evidence from documentation, such as media documents, reports, annual reports,
circulations. These approaches enabled the researcher to look at the subject under
investigation in more depth. In summary, the idea behind conducting qualitative
research was to realise the issues related to the process of strategic decisions within the
banks in Libya. Moreover, the aim was to investigate what happened in the process
itself and how the factors impacted on the process and in the environment surrounding
it.

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4.1.6 A case Study Approach

A case study approach has been used in this research in order to explore and analyse
how SDM works in Libyan Commercial Banks. According to Yin (1981, p.58) a
“…case study does not imply the use of a particular type of evidence. Case studies can
be done by using either qualitative or quantitative evidence. The evidence may come
from fieldwork, archival records, verbal reports, observations, or any combination of
these…” In this context, there are three types of research in case studies Yin (2003).
These are: (1) exploratory research; (2) explanatory research; and (3) descriptive
research. In order to achieve the aims of this research the researcher used exploratory
research to understand how defined strategic decisions which were recently taken by
banks were made. A case study is one particular form of fieldwork which examines in
depth an organization (or series of organizations) over time (Stake, 1995; Hamel et al,
1993). Saunders et al. (2007, p. 139) identified a case study as “a strategy for doing
research which involves an empirical investigation of a particular contemporary
phenomenon within its real life context using multiple sources of evidence”.

The research studied each strategic decision of a bank as a case study, this allowed the
researcher to analyse each decision, as a separate case study. In a similar way, multiple
strategic decision case studies were studied by Blumberg et al., (2005). Due to the
homogeneity of the sample which was selected for investigation, the researcher studied
more than one decision in different banks. This may lead to similar results, because all
the decisions were subjected some similar factors. The research sought to explore and
analyse the DMPs of reaching a strategic decision within the context of organization,
society, economics and culture, using various sources of evidence, especially interviews
and documents. Ghauri and Grønhaug (2005, p.119) reported that; “students often ask
how many cases they should include in their study. The answer to this question is very
difficult, as there is no upper or lower limit to the number. Often one case is enough”.

In the current study the researcher investigated three Libyan Commercial Banks to
understand how strategic decisions were made, but the question was how many
decisions should be included in this research. As mentioned before, due to the
exploratory nature of this thesis, a case study approach which took each strategic
decision as a unit of analysis was used (Blumberg et al., 2005). In order to be able to
generalise the results of this study and to increase their robustness, five strategic
decisions were investigated (Yin, 2003). The selected case studies had to satisfy certain
68
criteria. One of the most important criteria for the selection of a decision to be studied
as a case was that it should be both strategic and traceable (Miller, 1997). The decisions
selected to be studied in this research had to be defined as strategic by all the
respondents within the selected bank, as stated by “Alexander (1986) who found that
strategic decisions can be judged in retrospect to assess their long-run outcomes”
(cited in Miller, 1997, p. 581). The homogeneity of the participants sample allowed the
researcher to study decisions in more than one bank. This leads to the possibility that
similar outcomes concerning the process and effectiveness of SDM will be found, and
that similar factors might have affected this process, increasing the strength of any
generalisations which are theoretical propositions (Blumberg et al., 2005).

There are weaknesses to this method. It requires cooperation from the organizations
involved for easy access to the information required (Dane, 1990). The process of
research could also be time-consuming, and at the same time frustrating (Hussey and
Hussey, 1997). In addition, the researcher was relatively inexperienced and bias could
have influenced the direction of findings and conclusions of the research (Yin, 1989).
The researcher followed the steps proposed by Patton (1980, p, 304), which are “… (1)
Assemble raw case data; (2) construct case record; (3) write case-study narrative”.

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4.2 Data Collection Methods

4.2.1 Data Collection

Once a particular research design is selected, the data collection method needs to be
determined, but no unanimity of opinion regarding data collection methods has been
noted in the literature. Strauss and Corbin (1990) suggested the use of multiple methods
to develop a rich research strategy. This means different data collection methods can be
combined in order to enhance effective data collection. An investigation of factors
affecting the SDMP in Libyan Commercial Banks has been conducted, combining a
review of the relevant literature and field work. Based on the scope of the investigation
and the nature of the information needed, it was decided that a questionnaire is not a
suitable instrument to gather data for this study.

4.2.1.1 The Interview Instrument

Interviews are an essential source of case study evidence because most case studies are
about human affairs (Yin, 2003, p. 92). These human affairs should be reported and
interpreted through the eyes of specific interviewees, and well-informed respondents
can provide important insights into a situation. They also can provide shortcuts to the
prior history of the situation, helping identification of other relevant sources of
evidence.

There are some advantages to using interviews: ―The interview is more appropriate for
complex situations; it is useful for collecting in-depth information; information can be
supplemented, and questions can be explained; interview has a wider application‖
(Kumar, 1999, p. 115). In addition, using interviews is recommended because it enables
the researcher to capture what actually happens in the explored social phenomenon
(Yin, 2003). Denzin and Lincoln (2005, p.10) state that qualitative tools enable the
highlighting of ―quantity and intensity‖ in explored phenomenon

Interviews are considered to be one of the best techniques that may be used to collect
valid and reliable data relevant to research questions (Saunders et al., 2003). In-depth
interviews can be very helpful to discover what is happening and to seek new insights
(Robson, 2002). In this kind of interview, the interviewer is in a good position to be able

70
to judge the quality of the answers of the participants, and to support the respondent to
give full and complete answers (Walliman, 2005). Walliman (2005) also adds that
interviewing is particularly helpful when qualitative data are essential.

An interviewer acquires data on the issues of his or her interest through the process of
interviews with the respondents. An interview is a qualitative method for the collection
of information. May (1997, p 91) stated that "Researchers need to understand the
dynamics of interviewing and sharpen their own use and understanding of the different
methods of interviewing together with an awareness of their strengths and limitations".
Interviews can be conducted by telephone or face-to-face. There are different kinds of
interview methods. The most widely used methods are unstructured, structured or semi-
structured.

The main feature of unstructured interviews is an unstructured set of questions, and the
interviewer asks these questions without a predetermined order to the respondents. The
main concept behind the unstructured interview is to gather ideas relating to a broader
interest so that the researcher can formulate a valuable insight about the variables,
which require more in-depth analysis. A structured interview requires a structured set of
questions. Here researchers must know what data are required and come into the
interview setting with a planned series of questions that she will ask the respondents.

The Interviewer has the opportunity to explain to every respondent their selection
process and their importance in the interview and the research. This communication
may help the researcher to build trust with the respondent and make them more
comfortable. Due to better communication, it is more likely the respondents provide
truthful data and give answers without any fear of adverse consequences. Interviews
provide the opportunity for an interviewer to get in-depth data from interviewees if
required, and he/she can modify questions as the interview progresses.

One common problem in any kind of research which can be faced by researchers is
respondents may bias the data when they are aware of possible adverse effects of
answering questions on sensitive issues and do not express their true perceptions
(Mitchell et al., 1982), but provide information that they think is what the interviewer
will be happy with. They are also aware of possible adverse effects of answering
questions on sensitive issues. Lack of anonymity is a disadvantage that can be

71
mentioned, whereas a mail questionnaire does not have this problem. The presence of
the interviewer may cause the respondents anxiety.

One common problem in any kind of research which can be faced by researchers is
respondent bias. Respondents may misrepresent their data when they are aware of
possible adverse effects of answering questions on sensitive issues, and may not express
their true perceptions (Mitchell et al., 1982), instead providing information that they
think is what the interviewer will be happy with. They are also aware of possible
adverse effects of answering questions on sensitive issues. Lack of anonymity is a
disadvantage that can be mentioned, which can be overcome by, for example, a mail (or
email) questionnaire. Therefore, the presence of the interviewer may cause the
respondents anxiety.

Questions for the semi-structured interviews are decided before the interviews. In this
technique, interviewers can establish a close connection with the interviewee and it
helps them to investigate the motives and beliefs behind the answers (May, 1997).
Moore et al., (1995) recognised that issues which are complex or sensitive may be
examined by qualitative approaches through a semi-structured interview, allowing for a
deeper understanding of issues. People are able to freely express their opinions in their
own way in a semi-structured interview. In the initial stage of the interview, structured
questions are asked to the respondents and, with the progress of the interview, these
questions become deeper and more open-ended, in order to gain additional information
from the respondents (Gall et al., 1996).

In this research, semi-structured interviews were the main technique for data collection.
The researcher chose this technique for the following reasons: (1) Participants had an
opportunity to express themselves in their own words. Despite the fact that respondents
may find it difficult to answer this type of question, and it is equally difficult to analyse,
previous authors have also investigated the SDMP by using interviews (e.g. Eisenhardt
and Bourgeois, 1988; Papadakis et al., 1998). (2) The researcher did not want to test a
hypothesis but rather to conduct a research process, which provided opportunities for
interpretation. In this study the researcher adopted the open form of questions for the
semi-structured interviews from questions used in previous survey studies (Papadakis
et al., 1998; Elbanna and Child, 2007a).

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In this study, the main purpose of the semi-structured interviews was to get the full
`decision story` from each of the senior managers, without unwanted interruption or
direction, and to reflect on their own perceptions. The interviewer was a guide,
providing a short list of the areas to be covered so that the discussions did not lose the
focus from the main points of interest, and interviewees had the opportunity to talk
freely about events that affected their decisions. These consisted of how the decision
began and how strategic it was, and respondents were able to relate the story as it
happened from its starting to its completion (Butler et al., 1993). The `what`, `how`, and
`why` aspects of the issues of interest were covered by the rich set of qualitative data
collected through the semi-structured interviews (Saunders et al., 2007).

4.2.1.2 Informal Observation

The research was aimed at investigating the nature of the SDMP within Commercial
Banks in Libya. In order to increase the validity of the results of this research,
‗observation‘ was used as a second instrument to get inside 'street level practice'
(Brodkin, 2000, p. 2) through which the researcher in this study was involved in
observing the way respondents interacted within the three banks which are the subject
of this study.

The researcher visited the banks under investigation many times extending over a
period of about two months, becoming familiar with the day-to-day business of the
banks: this allowed the researcher to form good relationships with the employees of the
banks by direct contact, especially as they appreciated the importance of the research for
Libyan Commercial Banks. The researcher took numerous notes to obtain some general
insights, and these were discussed with several employees, and senior staff.

The researcher focused on observation after the decisions were made, to discover for
herself whether the decisions were successful or not, through the daily integration with
employees within Bank. Furthermore, the researcher was able to assess the effects of the
real decisions and their consequences inside and outside the Bank. Observation was one
of the methods used in the research to collect data, and it kept the door open between
the researcher and respondents in their discussion, and also was a guide for the
researcher during her discussion with the respondents.

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4.2.1.3 Documentary Analysis

An important use of documents is to corroborate and augment evidence from other

sources (Yin, 2003, p.87). Sarantakos (2005) stated documentary methods appear in a
variety of forms, addressing the whole range of documents, from documents as the unit
of analysis to texts, thus he divided documentary methods into three types which are the
most common; (1) document study; (2) content analysis; (3) text analysis.

Table 4.2: Summary of Documentation‟s Strength and Weaknesses

Strengths
Stability: can be reviewed repeatedly
Unobtrusive: not created as a result of case
study.
Exact: contains exact names, references, and
details of an event.
Weaknesses
Retrievability: can be low
Biased selectivity, if collection is incomplete.
Reporting bias: reflects (unknown) bias of author.

Broad coverage: long span of time, many Access: may be deliberately blocked.
events, and many settings.
Source: adapted from Yin (2003)

By using this element (documentation) the researcher improved her understanding and
developed a general idea of the banks under investigation, to achieve the aims of the
research: thus documentation can be a help in qualitative research (Silverman, 2005).
Yin (2003) emphasised several strengths and weaknesses of documentation, which can
be summarised in Table 4.2.

The documentation used in the current research comes from the banks` official sources,
such as the laws and regulations and published reports of the banks under investigation.
However, the research was not allowed to look at all the documents concerning a
strategic decision due to the sensitivity of the subject under study

The documentation used in the current research came from the banks` official sources,
and included documents such as laws and regulations pertaining to banking, and the
published reports of the banks under investigation. However, the researcher was not
allowed to look at all the documents concerning a strategic decision, due to the
sensitivity of the subject under study. The key reasons for using documentary analysis
in this research were: the time was limited, thus it allowed the researcher to avoid
repetition in the data collection; the researcher was able to assess the quality and
reliability of the data collected through the interviews; and to view appropriate data.

74
4.2.2 The Study Population and Sample Selected

In a research study the first and most critical part is selecting the sample (Hussey and
Hussey, 1997). The most challenging thing for the researcher was to learn about what
top manager and medium mangers are thinking and doing in large banks. Researchers
need to formulate creative strategies by going beyond these limitations to get access to
their data (Snow and Thomas, 1994). As per the above discussion, researchers need to
select information on the basis of their competence rather than for their representation
alone. The researcher can talk to well informed people who understand the need for
information and are glad to provide it or can obtain it for the researcher (Bernard, 2011).
Considering the importance of strategic decisions it is likely that more than one member
of a top management team has taken the decision. Managers who actively participated
in making the SDs in question were members of top management (Bantel, 1993;
Amason, 1996).

The researcher considered the importance of the interview sample size; the interviews
were conducted by the researcher with the respondents, who consisted of sixteen
participants, all of whom worked in Libyan Commercial Banks (Bank A, Bank B and
Bank C). The interviews were also designed to gain further insight into the responses of
bank employees about changes in the environment. The researcher conducted interviews
with top and medium level respondents, who held positions of responsibility in banks,
in order to obtain sufficient information and different opinions, through interviews with
participants. This, together with an assessment of the available documentary evidence,
enabled the researcher to understand the functions and responsibilities of each of the
participants under study. The Interview schedule is given in Table (5.3).

The researcher collected the primary data from the managers, who were representative
of the total population of decision-makers in the Libyan commercial banking sector.
The respondents to this research were top and medium mangers who could relate the
content and sequence of events connected with SDMP in their organizations. As
Shortell and Zajac (1990, p. 828) argued, observing the perceptions of knowledgeable
key informants for an organization‘s strategic orientation is a more authentic approach
for measuring strategy. The fundamental part of any research study design is selecting
the population and it is one of the main stages in social research also. Three
Commercial Banks of Libya situated in Tripoli City were included in the research study,

75
and the sixteen interviews were selected because of their involvement with the five
decisions.

Table 4.3 Interviews Schedules

Interviewe Bank Position Role & Responsibilities

e

P1 A Executive Studying offers by foreign companies, attending informal

Manager meetings, maintaining the unity of a network server, preparation
of monthly reports in accordance with the indicators of the plan
and submitting them to the Director-General and follow-up to
the level of implementation of the project.

P2 A Manager of Organizing the work in financial management, leading to the

Accounting arrival of the correct information at the right time for decision-
Department makers, analysis of investment opportunities, clarifying the
financial implications of the decisions.

P3 A Member of Attend regular meetings for the management committee

Board of members, develop plans and programs to serve the objectives of
Directors the Bank, and contribute to activate the standing committees
and special committees

P4 A Manager of looking for investment opportunities and how to market goods,

Marketing identify areas of problems, predicting them before they occur,
Department review the bank`s strategies in order to remain compatible with
the market, and collecting and analyzing information about
customers to identify the orientation and then the ability to
satisfy their needs.

P5 A Member of Attend regular meetings for the management committee

the Board of members, review the data, information and statistics related to
Directors the decision, and study and evaluate technical and economic
decisions.

P6 A Manager of Assistance in financial planning long-term, medium-range and

Accounting short-term, choose the appropriate information correctly,
Department accurately and usefully from among the vast amount of
information, and contribute to take the necessary measures to
provide new sources of funding.

P7 B Manager of Organizing the work in financial management, leading to the

Accounting arrival of the correct information at the right time for decision-
Department makers, analysis of investment opportunities, attend periodic
meetings within the bank, achieving a financial and accounting
settlements within and outside the bank, and Assistance in
financial planning for decisions-making .

P8 B Manager of Contribute to take the necessary measures to provide new

Marketing sources of funding, review the bank`s strategies in order to
Department remain compatible with the market, and collecting and
analyzing information about customers to identify the
orientation and then the ability to satisfy their needs,
contributing to the diversification and improving the quality of
banking services.

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P9 B Deputy The same duties as general manager and helping him in his
General duties and deputy in his absence, taking the necessary action to
Manager of conduct the bank business and to take administrative action to
Commercial hold violators in accordance with the laws and regulations,
Bank participation in making the decisions in the bank, and proposing
all necessary means to develop and improve bank performance
and its branches.

P10 B Manager of Identifying the training requirements of the bank and preparing
Training for the training plan, preparing the studies and research that
Department would raise the efficiency of training, the statistics and data on
programs and trainees, the manual training companies and
trainers, studying and evaluating the offers and the nomination
of companies that will assign them to implement the programs,
follow up and evaluate the implementation of training
programs.

P11 B Manager of Achieving a financial and accounting settlement within and

Accounting outside the bank, preparing the budget estimates for the training
Department plan, and clarifying the financial implications of decisions, and
attending periodic meetings within the bank.

P12 B Deputy The same duties as general manager and helping him in his
General duties and deputy in his absence, responsible for assisting the
Manager of Director-General in the supervision of the progress of work
Commercial within the bank and its various branches, the responsibility of
Bank studying the draft reports on the progress of work at the bank,
and his view before submission to the Director-General, as
proposed by all necessary means to develop and improve bank
performance and its branches.

P13 B Manger of Risk Identification, data analysis and information to identify

credit and different types of risks facing the bank, draw up action plans of
Risk various departments and the level of commitment to follow-up,
Managemen in order to identify and categorize clearly all types of risk
t (financial, operational, market risk, liquidity and legal, etc,
control the size of the risks to minimize their negative effects
on the bank and by working to invent and activate mechanisms
to reduce financial risk, and measure the risks and determine
their effects on bank.

P14 C Manager of Identify the training needs of the bank, preparing the budget
Training estimates for the annual training plan, preparing the manual
Department training companies and trainees in each area of specialization,
review the design of training programs provided by the
companies and third parties, and monitor and evaluate the
implementation of training programs.

P15 C Member of Attend regular meetings for the management committee

the Board of members, contribution to plans and programs to serve the
Directors objectives of the bank, and contribute to activating the standing
and special committees.

P16 C Manager of Attend formal meetings of the bank, evaluation of proposals regarding
Administrati the development, standardization, harmonization of policies,
ve Affairs regulations and procedures that address affairs administrative staff or
services, or public relations in the bank, preparation of development
plans and administrative development of workers in the bank, the
application of policies and procedures that promote public relations
reputation of the bank at home and abroad, and providing management
consulting for all departments in the bank, and contribute to the
development and coordination of administrative relations in the bank.

77
4.2.3 Bank Selection

The respondents were drawn from one sector - the Commercial Banks in Libya. From
these three Commercial Banks (Bank A, Bank B and Bank C) for the interviews; each
of these banks had between 1500-3000 workers. The three banks are considered as
leaders in the Libyan banking industry. Banks play a supporting role for growth and
development of the Libyan economy by solving the financial needs of various domestic
and regional economic projects, facilitating international trade activity, and participating
in comprehensive financial constructional projects and activities in the country. Its
importance to the economy, and its relatively homogeneous operational system
influenced the researcher to choose the banking sector for this thesis, to increase the
validity of the results (Chiang, 2005).

In order to avoid identifying the banks surveyed by an account of their financial

position, figures will be presented for the financial position of all Libyan Commercial
Banks at the time the strategic decisions that are the subject of this study were taken.
According to the annual report of the CBL (2008) the Commercial Banks in Libya
achieved growth in their financial position in 2008, raising their total budget to about
33.2834 billion dinars, an increase by 83% from what it was at the end of 2007. This is
a reflection of the expansion of banking services to its customers, especially in the field
of mediation finance.

On the side of liquid assets, the balance of assets held at Commercial Banks was raised
to 15.8964 billion dinars, representing an increase of 75%, to reach at the end of 2008 to
about 37.0939 billion dinars, compared to 21.1975 billion dinars at the end of 2007.
Thus rise was due to an increase in deposits to the Central Bank of Libya of about
14.3593 billion dinars, to reach the total about 32.5077 billion dinars at the end of 2008,
as a result of the investment by banks in certificates of deposit with the Central Bank of
Libya. Furthermore, the banks increased their deposits by about 283.7 million dinars,
bringing the total to 510.8 million dinars at the end of 2008, and there were an increase
in cash in the fund from the local currency and foreign currency held by Commercial
Banks to about 9 million dinars and 3.2 million each, respectively.

In addition, the Commercial Banks achieved an increase in bank credit by 2.3536 billion
dinars in 2008, up by 28.7 % to 10.5449 billion dinars, compared to 8.1913 billion

78
dinars at the end of 2007. This was because the balance of loans increased economic
activities and service productivity by about 1.8988 billion dinars, a rise of 39.0%.

The balance of fixed assets rose by 889.6 million dinars, or a rate of 49.8%, to reach a
position at the end of 2008 of 2.6769 billion dinars, compared to 1.7873 billion dinars at
the end of 2007.

Finally, the capital accounts and reserves of the Commercial Banks increased by about
506.2 million dinars, or a rate of 30.5%, and this increase amounted at the end of 2008
to 2.1676 billion dinars, compared to 1.6614 billion dinars at the end of 2007.

From the summary above, it is clear that Commercial Banks enjoyed a strong financial
base which contributed to the support of the Libyan economy. Within this context, the
aim of the observations made by the researcher in this study was to understand the
essence of market players‘ thinking regarding the SDMPs in the Libyan banking sector,
to explore which factors may affect the SDMP in Libyan Commercial Banks.

4.2.4 The Method of Selection for SDMP

1- Qualitative data is the main method employed in this research to understand the
SDMP of Libyan Commercial Banks. In order to investigate how these decisions were
made, it was necessary for the researcher to elicit different views from different
participants of the SDMP.

2- The researcher started the study process by meeting with managers of financial and
management departments of three Libyan Commercial Banks, who helped the
researcher in ways such as, (1) to select the strategic decisions, and giving an overview
of each decision, (2) to organise and arrange interviews with other departments‘
managers.

3- The researcher conducted interviews with top level participants, who held positions
of responsibility across Libyan Commercial Banks. The researcher took into account
the importance of the interviewees to discuss with them questions such as what were
the most important strategic decisions made in the previous period, in their opinion,
taking answers from respondents‘ different positions of responsibility. Nine strategic
decisions were selected for study. However, the thesis includes the analysis of five
decisions an availability of interviewees was too limited for the other decisions.

79
4- The researcher determined the nature of strategic decisions taken by Libyan
Commercial Banks, and determined five strategic decisions which had been taken. This
was after deep discussion with respondents.

5- This study is exploratory in nature, and seeks for elements that had an impact on the
DMP and whether the decisions were effective or not. However, when the researcher
was selecting strategic decisions to study, she did not focus on whether the decisions
had been successful or not: the selection of strategic decisions was based on the answers
of the participants, who identified which decisions they considered most important to
their bank.

6- The respondents emphasised that these strategic decisions had an impact on the
banks, and the motive for and importance of these decisions arose from the importance
given to five decisions, so the participants stated several points to be used as
measurements to determine what were strategic decisions; such as: (1) all of the
strategic decisions made had increased returns and reduced risks to their business, (2)
all of the strategic decisions made had contributed in implementing banking sector
reform strategy, (3) all of the strategic decisions made had complied with the conditions
of international bank regulation, (4) all of the strategic decisions made had an impact on
the banks` behaviour, in terms of their performance.

4.2.5 Personal Interview Arrangement

In order to arrange semi-structured interviews, the researcher introduced letters of

recommendation written by the Libyan embassy in London to Libyan Commercial
Banks (see Appendix 1). Thus, the researcher started her journey to collect data,
initially with officials in the departments of the financial managers of Libyan
Commercial Banks who helped the researcher as follows: (1) to select the strategic
decisions which were taken by Libyan Commercial Banks, and gave an overview on
each decision, (2) to organise and arrange interviews with other managers of
departments who had contributed to the issue and had knowledge of these strategic
decisions, (3) and to direct the researcher to take some administrative procedures in
order to achieve this task.

So, they were very useful intermediaries. The researcher followed several steps in
arranging interviews with respondents, contacting each on a one-by-one basis. Within a

80
week, the researcher received calls from banks. Following this, the researcher started to
visit banks to arrange first meetings with respondents. These meetings were intended to
introduce the researcher and the importance of the research to banks, and to determine
the time, date and location of the interview with respondents.

4.2.6 The Selection of Interviewees

The role of the researcher is to visit the case ‗location‘ and conduct interviews about the
subject of the research. The sample size for analysis in this research was five strategic
decisions in three banks. The research used both primary and secondary data.

The reason for choosing three banks was that they were the biggest Libyan Commercial
Banks in terms of the number of employees and bank capital, which enabled the
research to obtain sufficient information on the strategic decisions made. Berger et al.,
(1989) have emphasised that the criteria usually considered as significant in an effective
researcher are: (1) honesty, trustworthiness and self-control; (2) sociability and social
acceptability; (3) accuracy and dependability; (4) objectivity, and lack of prejudice; (5)
verbal ability and ability to listen to others carefully; (6) interest in and familiarity with
the research topic; (7) ability to work with others in a team of experts. Huber and Power
(1985, p.174) reported that:

“because the units of analysis are so costly to assess in studies of strategy and
policy formulation, and because much of the information about a given event must
be obtained from a single key informant, it is extremely important that the data
collected be as accurate as possible. Consequently, it is crucial that researchers
collect their data from the most appropriate person in the organization”.

Data collection by interview in banks took place at the beginning of June 2010. This
procedure encountered several problems, such as the fact that all respondents were very
busy and it was difficult to arrange a time for the interviews. To overcome these
problems, the researcher suggested a timetable rather obvious for each respondent.

In this timetable each respondent determined which time was appropriate and if he/she
wanted to divide the time of the interview, and also the location of the interview.
Achieving this task took about two months (for each day about 5 hours), this time
included conducting the interviews and transcribing each interview immediately
afterwards. The researcher obtained permission from respondents to record their
interviews during the meeting; and the participants were given the choice of accepting

81
or rejecting having the interview recorded. In addition, some of the participants took a
copy of the interview in order to protect themselves. The researcher used a digital
voice-recorder to keep an audio record of the interviews (Ritchie and Lewis, 2003).

4.2.7 Rationale for the Selection of Personal Face-to-Face Interviews

The interview is one of the most important and effective methods of data collection
(Hussey and Hussey, 1997). In addition, according to Cannel, 1957 (cited in Saunders et
al., 2003, p. 245) an interview is ‗‗a purposeful discussion between two or more
people‘‘. Hotho and Champion (2011) describe that there are many merits of
interviewing, related to the long length of time spent with an individual respondent,
including greater depth, allowing attitudinal and behavioural insights, the elimination of
negative group dynamics, and more control over the direction of the discussion.

Moreover, there are many kinds of interview, such as personal face-to-face interviews,
telephone interviews, mail interviews, and each type of interview has advantages and
disadvantages (see Zikmund and Babin, 2006). The researcher tried to select the best
method of interview, which allowed her to build more confidence with respondents and
to collect more information in order to answer the research questions: finally the
researcher took into account that socially and culturally, people appreciate personal
attendance. Thus the face-to-face interview method was selected for data collection, due
to that method allowing the researcher to conduct interviews in a variety of situations
(supported by Pope and Mays 2006). The researcher excluded telephone interviews, as
the interview questions were long, and it would have been difficult to get a lot of clear,
detailed information over the telephone. Moreover, this method was costly, which
would have meant an expensive price to call in a country like Libya and this would have
cost the researcher enormous amounts, which together with the possibility of
misunderstanding the questions due the inevitable difficulties of phone calls and the
consequent difficultly of giving explanations on the phone. Furthermore, the researcher
noted that email interviews were not popular with respondents. Based on the above
argument, the researcher decided to use the semi-structured interview as a method to
collect data.

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4.2.8 Design of the Interview

The objectives of the research and the responses of the respondents are affected by the
design of the questionnaire (Robson, 2002). Thus, the format and length of the
interview can be affected by the responses of the interviewee. The researcher followed a
face-to-face interview method and an inductive approach, this allowed the researcher to
go deeper to understand more information about the SDMP in Libyan Commercial
Banks, in order to develop theory, and to allow the possibility of adding new ideas and
aspects in this area, as supported by Crane (1997). To build a basis for an interview
designed to collect and analyse data for this research, the researcher depended on
primary data such as professional literature related to the SDMP. Thus, the design of the
interviews in this research followed the literature, academic guidelines and the previous
experiences of other researchers.

The researcher based the interview questions on Elbanna and Child‘s survey (Elbanna
and Child, 2007a), and edited the Elbanna and Child questionnaire to correspond with
the research questions and to be suitable for semi-structured interviews. One reason for
selecting the Elbanna‘s survey was due to Libya and Egypt being relatively similar in
terms of their culture, habits, traditions, environment and religion, as well as being
neighbours. The researcher excluded some questions and combined some questions
because (1) the questionnaire was long and had closed questions (2) the questionnaire
gave alternative answers (3) and finally they designed their questionnaire for a
quantitative survey. Thus, the researcher created open questions to provide for a greater
variety of opinions and give the respondents the opportunity to offer additional
information.

The interview design was divided according to the main themes studied in this research,
and each theme included specific questions to cover the research. This structure helped
the researcher and the respondents in terms of the sequence of ideas and the conduct of
the interviews. It increased confidence between the researcher and the subjects. The
questions were conducted with all of the interviewees, in order to elicit information
related to the SDMP in Libyan Commercial Banks. The researcher took into account
that the sequence of questions within interviews was very important if the research was
to achieve its aim (Churchill, 1995). This allowed the respondents to move from one
question to the next very simply, in order to help the respondent to keep a sequence of
her ideas.
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Previous studies into the SDMP, and the experience the researcher in this field helped
the researcher to interpret her findings. In addition, the researcher discussed the
questions with her supervisors, in order to have their opinions before starting to conduct
the interviews. The questions were designed in English and then translated into Arabic
by the researcher, and this was supported also by several translation offices and several
faculty members who specialised in linguistics, in order to avoid misunderstanding of
the interview questions. Both the English and Arabic versions of the questionnaire were
similar in this research in terms of the same layout, paper, order of questions, and
number of pages (see Appendices 2&3 for both version).

4.2.9 Conducting the Interviews

In order to have sufficient information and a deep discussion with respondents, and also
due to the importance of the research, the researcher used semi-structured interviews.
Potter and Heplurn (2005, p. 300) stated that ―Although qualitative interviews are
treated as relatively easy to perform, they are very hard to do well‖.

The data collection of this research took about two months (June and July in 2010), and
each interview took between two and half hours to three hours, in locations such as
informants‘ offices, but the researcher tried to maintain a balance between time, cost
and the need for accurate answers to the questions. In addition, the researcher also took
into account common errors that were identified by Berger et al., (1989) such as
recording errors, evaluation errors and instruction errors. The greatest problem facing
the researcher was how to organise the timetable of interviews with informants, as all
informants had responsibilities in their banks and thus were extremely busy. To solve
this problem, the researcher asked each informant to determine the time and location of
interview. In order to manage time and effort more efficiently, the researcher gave
informants her mobile telephone details so that they could contact her if they wanted to
change the time or location of the interview.

In this study sixteen interviews were conducted with the senior manager within the
banks, and the list of personnel interviewed in each bank is shown in the Table below.

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Table 4.4: Details of Interviewees and Banks Used in this Study
Banks Strategic Decisions and Interviewees
The Main Interviews
Bank A New technology Decision
P1 = Executive Manager ( New technology )
P2 = Manager of Accounting Department
P3 = Member of Board of Directors (Director of Credit and Risk Management)
Islamic Murabaha Decision
P4 = Manager of Marketing Department (Executive Manager)
P5 = Member of Board of Directors
P6 = Manager of Accounting Department
Bank B Islamic Murabaha Decision
P7 = Manager of Accounting Department
P8 = Manager of Marketing Department
P9 = Deputy General Manager of Commercial Bank
Training Decision
P10 = Manager of Training Department
P11 = Manager of Accounting Department
P12 = Deputy General Manager of Commercial Bank
Bank C Training Decision
P13 = Manger of credit and Risk Management
P14 = Manager of Training Department
P15 = Board of Directors (Director of Training)
P16 = Board of Directors (Director of Administrative Affairs)

4.2.10 Piloting the Interview Instrument.

The researcher tried to enhance the validity of her research in terms of the interview
questions by asking participants in the five pilots to identify what they regarded as
strong or weak questions. This procedure was achieved by allowing people who had
knowledge and experience in this field to participate in the pilot study. The researcher
modified the questions according to the comments received from participants; this was
done initially by discussing the interview questions with her supervisors in meetings.
Following this, the researcher distributed copies of the interview questions to selected
colleagues, all of whom were studying at postgraduate level at different universities in
the UK. As a result of comments and observations by this group, some questions were
deleted and the wording of some questions was changed to aid clarity. Having made
these changes, copies were distributed to employees of Libyan Commercial Banks
known to the researcher, who made a final check of the relevance and clarity of the
interview questions.

In addition to the above, the researcher explained each question included in the
interview guide to each respondent, because she intended to receive their opinions about
the interview questions in order to achieve the aim of the research. The pilot study was
designed to collect opinions from respondents about the interview questions, guided in
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two ways: firstly in person, secondly to provide additional information by email and
telephone. The interview question guide was prepared in English. Since all respondents
are employees in Libyan banks, the interview questions were translated from English to
Arabic. The researcher strove to guarantee the ‗correctness‘ of translation, taking
consideration of contextual equivalence, and she was supported by several translation
offices and several faculty members who specialised in linguistics.

4.2.11 Ethical Considerations

Most research situations involve three parties, the researcher, the sponsoring client
‗user‘ and the respondent ‗subject‘ (Zikmund, 1997). The method or type of interactions
between any of the parties requires consideration into ethical issues that may arise. The
term ethical means rules of behaviour or conformity to a code or set of principles
(Kimmel, 1988). For research this means effectively managing the expectations of all
parties (Robson, 2002; Zikmund, 1997) and ensuring that the research strategy chosen
does not violate the participant‘s privacy or disrupt their day to day actions at work
(Marshall and Rossman, 1989).

The researcher followed the framework of the University of Gloucestershire‘s Research

Ethics Code within personal interviews. All the conditions of the Ethics Code in terms
of confidentiality, the right to refuse to answer questions, the right to oversight of
responses before use in the study and the right of the participants to have their identities
protected were adhered to. A personal letter was sent to the interviewees/participants
informing them of the time required, the content of the interview, the purpose of the
research and the confidentiality of the data/information provided, and thus they then
agree to take part. Interviewees were shown the result of the interview, providing the
opportunity to correct any misunderstandings on the part of the interviewer. They were
reassured of their right not to answer and to withdraw their statements if they so wished.
For the sake of confidentiality, fictitious names were used to prevent participants being
identified (Berg and Lune 2004).

Once the research was approved, the researcher had another meeting with the Director
of Administrative Affairs to discuss in more detail the purpose of the research and the
ways it would be conducted within the given organization. The research information
sheet provided participants with information on the research and all the necessary
contact information for the researcher and her supervisors. The consent form contained

86
a written statement which explained that participation in the study was to be voluntary
(Marshall and Rossman, 2010) and would be conducted without duress, undue
influence, or financial inducements. The consent form also notified the participants that
the interviews would be tape recorded, analysed and kept in a secure place, before being
destroyed. In addition, the banks agreed to participate in the research as long as their
names (banks and participants) would remain confidential. Therefore, the study refers to
three banks (A, B, C), and sixteen participants, referred to as participant P1, P2, P3 etc.

The researcher obtained permission from respondents to record their interviews, and the
researcher confirmed to the respondents the confidentiality policy of the University of
Gloucestershire, and that the interviews would be used for academic study only (May,
1997; Ritchie and Lewis, 2003).

4.3 Section Three: Data Analysis Process

4.3.1 Data Analysis

In- depth interviewing ―is the hallmark of qualitative research. ‗Talk‘ is essential for
understanding how participants view their worlds. Often, deeper understanding is
developed through the dialogue of long, in-depth interviews, as interviewer and
participant ‗construct‘ meaning. (Rossman and Rallis, 1998, p. 93)‖ Due to the
importance of sample size to qualitative interviews, this research consisted of sixteen
respondents, all employees in Libyan Commercial Banks in different senior positions of
responsibility.

The researcher followed the methods of standardized open-ended interviews in this

research. Therefore, the researcher transcribed the entire interview with respondents,
and classified it according to the structure of the answers. There are two kinds of
approach methods as reported by Bryman, (1994), the first approach is deductive
approach, and the second approach is inductive. The inductive strategy is more
associated with a qualitative approach and that the deductive strategy is more associated
with the quantitative approach.

Rudestam and Newton, (2001) reported that the strategy of qualitative data depends on
conversation in terms of the collection and analysis of data. Thus the inductive approach
usually contributes to the emergence of a new theory; with the result that qualitative
research is likely to be inductive rather than deductive. In addition, Patton (1990)
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reported that in qualitative research; the information created is analysed using an
inductive data analysis method. In this context, this research was exploratory in nature.
Patton (1990) stated that inductive analysis indicates that the categories, themes and
patterns of analysis come from the data. The coding method used in this research is as
described by Nachmias and Nachmias (1996).

4.3.1.1 Transcribing

The researcher asked permission to record all the interviews using electronic recording
equipment. Seven interviewees agreed to be recorded, while nine interviewees declined:
the recorded interviews were transcribed by hand into written Arabic, while those
interviews not recorded were written up from notes taken by the researcher. The
research took into account each word by word transcription created for each interview
in relation to all the decisions. The Arabic data were analysed, and summaries of the
data were translated into English. a translation should be ―a perfect parallel to the source
text‖ (Crystal, 1997), In order to enhance the validity and reliability of findings in this
research, the researcher ensured that the process of translation was labor-intensive, in
order to make sure that pertinent meanings of the interviews were not lost.

4.3.1.2 Open Coding

The researcher transcribed, coded and organized the interviews using the audiotape-
recordings which were made into themes and sub-themes that evolved out of the
generated materials in this research. This allowed the researcher to make themes and
sub-themes of information about the phenomenon of this research. Thus, the research
covered all the questions by using themes and sub-themes, thus the open coding process
in this research consisted of eleven themes, and each theme consisted of sub-themes,
and each one was assigned a code.

4.3.1.3 Generating Themes

The main themes of this study were based on from the design of questions based on
Elbanna and Child`s, 2007a survey, and the research framework (Figure 4.1) The
researcher listened many times to her recorded interviews and made notes for each
question with each respondent (views, opinions and remarks); this allowed her to
generate sub-themes, appearing from the recorded interviews. For the interviews which
were not recorded, the researcher used her notes and recollection of the interview to
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generate sub-themes from the responses given. These have contributed to achieving the
aims of this research, due to fact that the sub-themes represent multiple perspectives. In
addition, the researcher endeavoured to avoid any repetition of sub-themes.

4.3.1.4 Axial Coding

The aim of using axial coding was to reassemble data that were fractured during open
coding, as supported by Strauss and Corbin (1990). In this context, Brown el at. (2002)
stated that there are four analytical processes which occur in this process: (1)
continually relating sub-categories to a category, (2) comparing categories with the
collected data, (3) expanding the density of the categories by detailing their properties
and dimensions, and (4) exploring variations in the phenomena. The researcher
identified themes and sub-themes in this research in the stage of ‗open coding‘. Those
were related to the phenomena under investigation. The themes of this research were
already identified from the literature, but sub-themes were identified through the
interviews themselves, and had a relationship with the themes (Strauss and Corbin,
1990). The general themes and sub-themes were classified and coded, with each with a
given numerical code.

4.3.1.5 Selective Coding

Selective coding as ―the process of selecting the core category, systematically relating it
to other categories, validating those relationships, and filling in categories that need
further refinement and development‖.(Strauss and Corbin, 1990, p. 116). Within each of
the interviews the researcher identified a narrative thread work and a sequence of events
based on the main themes, systematically relating it to other themes that emerged from
the data in axial coding.

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Table 4.5: Interview Coding
Categories (themes ) Sub categories ( sub themes ) Coding
1. Rationality 1.1 Gather relevant information. Ray
1.2 Analyse relevant information R: gath
1.3 Crucial information R:relev
R:cruci
2. Intuition 2.1 Personal judgement Inn
2.2 Past experience I: pers
I:past
3. Political behaviour 3.1 Openness with each other about interests Por
and preferences (reverse scaled) P: open
3.2 Power to defend preferences P: powe
3.3 Bargaining among decision-makers scaled) P:barg
4. Decision importance 4.1 Decision importance impo
4.2 Subsequent decision I: impo
4.3 Consequences if something went wrong I:subs
4.4 Delaying the decision I:cons
I: dela
5. Decision uncertainty 5.1 Clarity of kind of information to be Uncr
collected U:Clar
5.2 Uncertainty about the actions to be taken U:unce
5.3 Difficulty of predicting the outcome U:diff

6. Decision motive 6.1 Motivation to make the decision Moti

M:moti
6.2 Adequate freedom in addressing the M:adeq
decision
7. Environment al hostility- 7.1 Threat to survival Envi
munificence 7.2 Stressfulness E:thre
7.3 Dominance over the company E:stre
E:domi
8. Environmental uncertainty 8.1 Product Envi
8.2 Economy E:prod
8.3 Competition E:econ
8.4 Governmental policies E:comp
E:gove
9. Performance 9.1 Financial and business performance Perf
9.2 Organizational effectiveness P:fina
P:orga
10. Decision 10.1 Success in achieving decision objectives Effe
Effectiveness 10.2 Hindsight that the right choice was made E:succ
E:hind

Several authors (Strauss and Corbin, 1990; Goulding, 2002) stated that there are several
techniques such as writing storylines, drawing diagrams, and sorting memos by hand or
by computer program which exist to identify the main category. The researcher was
using a data matrix by hand to make a good summary of all the interviews, in order to
see the relationships between the main themes and the emergent themes. This display
helped the researcher to identify points of convergence and divergence between the
answers of respondents in the SDMP. After that the researcher noted that there were
similarities according to evidence, remarks, views, and opinions expressed by the
respondents during interviews [see Appendix 4) which shows transcription of translated
(English) interview].

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4.3.2 Validity and Reliability

It is necessary to specify terms and ways of establishing and assessing the quality of
qualitative research Lincoln and Guba (1985) and Guba and Lincoln (1994, cited by
Bryman and Bell, 2007). They proposed two primary criteria for assessing a qualitative
study: trustworthiness and authenticity. The researcher adopted trustworthiness as an
alternative criterion for evaluating qualitative data in this research. In this context,
Lincoln and Guba (1985, P.290) assert that "the basic issue in relation to trustworthiness
[validity and reliability]is simple: How can an inquirer persuade his or her audiences
(including oneself) that the findings of an inquiry are worth paying attention to, worth
taking account of ?‖ The researcher needs to respond to four elements with their
corresponding terminologies in qualitative research: truth- value (credibility),
applicability (transferability), consistency (dependability), and neutrality
(conformability) (Lincoln and Guba, 1985). In this context, Denzin and Lincoln (2000)
stated that there is considerable disagreement over what constitutes good interpretation
of qualitative research. In order to test and investigate that data collection methods were
valid and reliable in this research, a model of trustworthiness was used as supported by
Krefting (1991). However, there is still debate among scholars about the terms of
validity and reliability (Hamersley, 1987). Thus, the researcher followed Lincoln and
Guba‘s (1985) model, which is discussed below.

4.3.3.1 Credibility

“Researchers judge the credibility of qualitative work by its transparency, consistency-

coherence, and communicability and should design interviews to achieve these
standards” (Rubin and Rubin, 1995, P. 85). Lincoln and Guba (1985, p.296) describe
credibility in two ways "first to carry out the inquiry in such a way that the probability
that the findings will be found to be credible is enhanced and secondly, to allow the
respondents the chance to look at and evaluate the findings of the study". The validity
of evidence can be improved by triangulation (Modell, 2009). The researcher took into
account the important techniques used such as (1) prolonged engagement, (2) persistent
observation, (3) triangulation, (4) referential adequacy, (5) and cross checks, in order to
enhance the credibility in this research. Hotho and Champion (2011) suggest that the
credibility of the study and the confidence of its conclusions can be maximised by
attaining the data from multiple data sources and contexts, stages of analysis and
researchers involved. Credibility is characteristic of a good measure. Thus the
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researcher used it in this research, because it is concerned with the extent to which
research measurement is precise, repeatable, and consistent.

The researcher claims credibility in the current research by checking and validating the
data about strategic decisions in Libyan Commercial Banks. The data was obtained
from interviews with senior managers, heads of divisions or examining banks‘
documents such as reports. The credibility of research results was increased by
triangulation and since the results of this research were obtained by different data
collection methods, triangulation is possible (Kimchi et al., 1991). The researcher used
three different methods to collect data in this research, in order to gain greater
confidence in the results of the research and, because it is concerned with the extent to
which research measurement is precise, repeatable, and consistent.

In addition, the researcher selected the methods that were appropriate to answer the
research questions, and this allowed her to compare her results with that of other
studies. The researcher used three methods: interviews, observation and documentation,
in order to overcome the inherent limitations in one data collection method. The
researcher combined these methods of data collection. The researcher, as any researcher
looking for reliability of her/his research, followed consistency throughout in all steps
of the data collection.

4.3.3.2 Transferability

The establishment of transferability by the ‗naturalist‘ is very different from the

establishment of external validity (Lincoln and Guba, 1985). Transferability is possible
when the findings of the research fit into situations outside the research scenario as
stated by Sandelowski (1986). In addition, Sandelowski mentioned that transferability is
viable when the research audience finds the research findings meaningful and applicable
in terms of their own experiences. Transferability in qualitative research refers to the
usefulness of utilizing the research process and its findings in the context of another
time and place. The researcher tried to construct an accurate research methodology, in
order to provide valid conclusions to her research. To achieve this objective, the
researcher tried to maintain the validity and reliability of each process at each stage of
the research.

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The researcher included the background of the SDMP into the research design, which
reflects the relationship between making strategic decision and dependent variables. As
mentioned in the literature, this allowed the researcher to go deeper to understand more
information about the process of strategic decisions, in order to develop the existing
literature, and to allow the possibility of adding new ideas and aspects in this area. The
findings of this research may be applied in other developing countries, and similar
contexts (Lincoln and Guba, 1985).

4.3.3.3 Dependability

Dependability can be viewed as a consideration of changing conditions in the situation

selected for research, as well as changes in the design (Marshall and Rossman, 2010).
The changes in the design of the research can then be refined based on the
understanding of the research setting. In this context, qualitative research should have a
reasonable degree of dependability (Tutty et al., 1996). It was enhanced through
triangulation to ensure that the weaknesses of one method of data collection were
compensated by the use of alternative data gathering methods in this study.

In order to avoid any weakness of data collection, the research used three methods to
collect data, thus if any one method has a weakness in terms of collecting information,
this means it can be covered by the other methods. This allowed the researcher to use a
triangulation methodology in this research. As mentioned within the literature. The
researcher took into account the approach suitable and efficient for the collection and
analysis of data for this research, to achieve the aims of the research, and also ensure
that the data contributed to answering all the questions of the research.

4.3.3.4 Confirmability

Confirmability is “analogous to the notion of neutrality and objectivity in positivism,

corresponding closely to construct validity. This test assesses whether the interpretation
of data is drawn in a logical and unprejudiced manner, and assess the extent to which
the conclusions are the most reasonable ones obtainable from the data” (Riege, 2003,
p.81). The researcher took into account the steps which are mentioned by Riege (2003)
who said that a confirmability audit of qualitative research is a technique to examine the
data, findings, interpretations and recommendations. It is important for the researcher to
have a plan or strategy for his/her research. According to the investigations within the

93
literature on methodology and a review of the SDMP, along with the literature review,
methods were chosen based principally on the nature of the research. The researcher had
a suitable plan in terms of data collection and analysis (Hussey and Hussey, 1997). In
addition, the researcher tried to construct an accurate research design, in order to have
valid conclusions to her research. To achieve this, the researcher tried to maintain the
internal validity of each process at each stage of the research.

Moreover, the researcher introduced the background of the research in the first four
chapters, regarding the SDMP. The researcher discussed and introduced justifications
for adopting the research methodology of this research, which involved a qualitative
method. The findings of this research have the potential to be applied in developing
countries with similar economy and banking system, which enhances the external
validity of this research.

4.3.3 Analysis Method Process

Approval from the previous research which reported that "(d)using the observation or
interviewing phase, one is at the same time trying to make some kind of (abstract) sense
... of the raw reality one is encountering" (Lofland, 1971, p. 121), During the early
stages of data collection, data analysis process began immediately (Shaw, 1999).
Data analysis was applied to the qualitative data and semi-structured interviews, which
came from the Libyan Commercial Banks. The qualitative research has five modes in
terms of analytic procedures, which are: organizing the data; generating categories,
defining themes and patterns; testing emergent hypotheses, against the data; and
searching for alternative explanations of the data, and writing the report (Marshall and
Rossman, 2010). Moreover, the researcher also realised that there were no "formulas or
cook book recipes‖ to best analyse qualitative data (Yin, 1994, p. 102).

The main themes and concepts existed already but emergent themes became apparent to
the researcher during the process of collecting the data, transcribing the interviews, and
writing the notes regarding the documents. The formal process of data analysis started
immediately after finishing the data collection process.

The researcher kept in mind the homogeneity of operations in the banking industry. The
interviews were conducted with a few strategic decisions-makers in three Libyan
Commercial Banks. After careful reading by the researcher of the themes and sub-

94
themes, content frequency analysis was used with the purpose of identifying the most
common criteria and factors across those interviews.

In consultation with the researcher's supervisors, sub-themes were identified to be

included with the analysis. Those which were stated by more than one respondent were
chosen to be included in the analysis and to answer the research questions. After
excluding the themes and sub-themes which were mentioned only once, ten elements to
measure the outcomes of the SDMP in Libyan Commercial Banks were selected.
Following this step, the researcher undertook an evaluation of each element, based upon
the answers of the informants and her diary notes. This stage focused on studying the
influence of each element on the outcomes of the process of each strategic decision [see
appendix (5)]. based on the answers of interviews who have been interviewed. The
researcher assigned a high (H) sign to give to those factors which were interpreted as
having a high influence on the process. A low (L) sign was given to those with a low
influence.

A medium (M) sign was given to those elements where the data showed that the
elements had a little influence on the outcome of the process, or when the data showed
that the respondent was unsure of the influence of a certain element. Three interviewees,
when dealing with the new technology decision within bank A, believed it to have a
high influence on procedural rationality, and consequently it was given ten (H) marks
see (Table 5.3, section 5.3.1). Consequently, the researcher depended on the average
answer of these interviewees, to assess the effect of a criterion on the SDMP. The
complete results are presented in the next chapter (6), with more details on the effect of
those themes on the SDMP in banks.

4.4 Summary
In this chapter the researcher has justified the methodology selected, together with the
methods for this research, explaining why other approaches were not taken. The
researcher employed a qualitative methodology, and semi-structured interviews as the
main method of data collection. Documentation and observations were also employed
as support and evidence to gather further information about the SDMP. The researcher
used post analysis of a series of five strategic decisions as her units of analysis as a
research strategy. The researcher introduced and justified the use of criteria suited to the
evaluation of the validity and reliability of her qualitative research.

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 CHAPTER FIVE

DATA ANALYSIS OF EACH STRATEGIC DECISION

5.1 Introduction

The methodological approach used in this study has been explained in chapter five. This
chapter presents the analysis of qualitative data collected using the interview approach,
and the observations and documentation defined in chapter five. As stated in chapter
five, this study is qualitative in nature. However, qualitative studies suffer from some
difficulties, one of which is the huge quantity of unstructured textual information and
material data that results specifically from interviews and/or other observations.
Nevertheless, qualitative data is attractive due to the rich information as presented by
the below data analysis and it is difficult to find analytical path (Miles, 1979).

Five strategic decisions were explored in this study as presented in table 5.1. For the
Islamic Murabaha decision, data were collected from case companies Bank A and Bank
B, while data were collected from case companies Bank B and Bank C for the Training
decision. Finally, data were collected from case company Bank A for the new technology
decision.

Table 5.1 lists the strategic decisions explored, and the banks involved in each case.

Table 5.1: Strategic Decisions and Case Companies Used

Strategic Decision Strategic Decision Type Case Companies
Used
Strategic Decision 1 New technology decision Bank A

Strategic Decision 2 The Islamic Murabaha Bank A

decision

Strategic Decision 3 Training decision Bank B

Strategic Decision 4 The Islamic Murabaha Bank B

decision

Strategic Decision 5 Training decision Bank C

The data analysis from this study is presented in five main sections: namely new
technology decision bank A (section 5.2), The Islamic Murabaha decision Bank A
(section 5.3), The Islamic Murabaha decision Bank B (section 5.4), The Training
decision bank B (section 5.5). The Training decision Bank C (section 5.6).

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The SDMP themes explored in this study were drawn from Elbanna and Child‘s
(2007a) paper, which included direct effects elements of: rationality, intuition and
political behaviour; and moderating effects elements of: decision importance, decision
uncertainty, decision motive, environmental uncertainty, munificence/hostility; firm
performance; and company size. In a uniform approach for presenting the analytical
findings (see Table 5.2) the main themes are specified, and then the sub-themes are also
defined. For each case study, the analytical findings are presented separately, where
data were collected from two banks for the same strategic decision.

Table 5.2: Data Analyses – Themes and Sub-Themes used

Th. Nr. Themes Sub-Themes
1 Procedural 1.1 Gathering Relevant Information:
Rationality 1.1.1 Identification of information required,
1.1.2 Decide methods of information
gathering,
1.1.3 Obstacles of gathering information.
1.2 Analyzing Relevant Information
1.3 Crucial information
2 Intuition 2.1 Personal judgement
2.2 Past Experience
3 Political 3.1 Openness with each other about interests
Behaviour and 3.2 preferences
Power to defend preferences
3.3 Bargaining among decision-makers
4 Decision 4.1 Decision Importance
Importance 4.2 Subsequent Decisions
4.3 Consequences if something went wrong
4.4 Delaying this decision
5 Uncertainty of 5.1 Clarity of Information type to be collected
the Decision 5.2 Uncertainties about the actions to be taken
5.3 Difficulty of Predicting the outcomes
6 Decision 6.1 Motivation to make the Decision
Motive 6.2 Confidence in making the right choice
7 Environmental 7.1 Threat to survival
Hostility- 7.2 Stressfulness
munificence 7.3 Dominance of the Company
8 Environmental 8.1 Product of new Service
Uncertainty 8.2 Competitions
8.3 Governmental Policies
8.4 Economy
9 Performance 9.1 Financial and Business Performance
9.2 Organizational effectiveness
10 Decision 10.1 Success in achieving the objectives of the
Effectiveness decision
10.2 Hindsight that the right choice was made

To present the data analysis, the results for each theme are summarised in the following
tables. Selected interviewee comments, translated into English, are presented to support
the analysis shown in the Tables. Sixteen main interviewees were used (see section 5.2,
Table 5.1), the researcher followed an ethical approach and interviewees (participants)
are referred to as P1 to P16, and Banks as A, B, and C.

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The researcher developed a simple analytical technique to analyse and organise the rich
data which were collected concerning the five decisions, using a simple categorical
scale. A uniform approach was followed to aid summarization. Three categorical
levels, `High`, `Medium` and `Low`, were used to interpret and summarize subjectivity
the degree of importance of the themes and sub-themes for each strategic decision that
was studied [see appendix(5)].

It is important to note that the interpretations into these categories were based on the
Arabic transcripts (plus other notes and reports) in order to minimise any loss of
meaning in translation.

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5.2 Data Analysis for New Technology System Decision (Bank A)
Table 5.3: Data Analysis for New technology Decision (Bank A)

Themes Variables/Su Activity Level: Summary of Analytical Findings Specific Comments from Interviewees
b-Themes High/Medium/
Low
5.3.1 Identification High P1, P2 and P3 noted that there were four key information types “...we had to prepare a preliminary report for the project which
Procedural of rational collected: (1) the cost of the new technology system, (2) training included the estimated costs and the duration of time required
Rationality information
required for employees, (3) the awareness of banking of the employees and for its implementation, the surrounding changes of the
citizens, (4) the offering of companies about technology systems environment in the bank: for example, culture of people and
for choosing the best offers employers, work requirements, policies and regulations in force
with the Bank, also, to prepare a comprehensive study of
The researcher was allowed to look at the reports and minutes of computer communications and information technology”. P2-A
the meeting. “I think that the most important information we have collected
was about any of the companies that have strong system
technologies and they are difficult to introduce”. P1-A
Decide High rational According to P1, P2 and P3 there were six sources (internal and “...The task of this committee to collect information, its study
Methods of external) to gather information. The internal sources included the and then its evaluation to introduce in formal meetings”. (P1-A)
Information use of: (1) internal committees composed of executive director of
Gathering
the project and group members, and (2) reports which were “...definitely, yes, we collected information about this decision.
collected from various departments. The executive has internal committees and their staff collected
They noted also, there was a spirit of initiative and cooperation the required data and prepared periodic reports internally.
between members of the Committee; as they received the Usually, the executive specified what information is needed to
assistance from various departments. Duo to the personal be collected for each employee. I was a member of the
relationship between managers and workers, which it were a big Committee, we cooperated with each other to get information,
role in their access to information. The external sources were and we acquired the assistance from other
engineering Consulting Bureau and also visiting Arab and foreign departments. Whereas, in some cases, the executive of the
countries which use the same technology such as UK, Egypt, project independently collects the necessary information, and
Lebanon, Jordan and Dubai. Moreover, both P1 and P2 added presents the report in the meeting which is held between the
that other methods to obtain additional relevant information President of the Board Directors and managers of
included attending training programs and undertaking economic departments”. (P3-A).
feasibility studies.

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 (Researcher observations)
The researcher remarked that during a visit to the Bank she was
introduced to the staff, and she noted that most of the staff knew
each other by kinship or friendship, and this supports that there
was cooperation during the DMP. This was observed by the
researcher for all of the three banks.
Obstacles to Medium P1, P2 and P3 suggested three difficulties in gathering
Gathering rational information, which were: (1) the lack of information database:
Information
even though the bank has qualified personnel in computer
technology, they did not make use of the competencies; (2) the
communication network was very weak. To solve this particular
problem though, they contacted the (GPTC) to support their
communication network infrastructures, (3) the required data
were distributed in too many administration departments, due to
the large size of the bank and the bank has several branches
across the country.
Analyse High rational Respondents P1, P2 and P3 indicated that the bank analysed
Relevant relevant information by using the Engineering Consulting Bureau
Information
which had experience in this field. The analysis of the
information was very high, and the bank lacked qualified staffs in
the analysis of information. Also, the bank had not standard
information database. Consequently, the bank used the services of
the Bureau, as they had the optimal technology system. Also,
from interviews, it was evident that there were differences in
views among members of the board of directors about the choices
of alternative optimisation.
Crucial High rational Respondents P1, P2 and P3 pointed out three points concerning
Information
managers succeeding in receiving crucial information. The
respondents believed that crucial information included banking
regulations and foreign banks entering Libya which had used
modern technology. Also they added that people's awareness of
using this technology was crucial information for this strategic
decision.
100
“As we have acquired the information through our personal
relationship with other mangers in different departments in the
bank, and by virtue friendship between staff and colleagues
which we create between us. This way it was easier for us to get
the information”. (P2-A).
"... we had difficulties in making this decision thus we depended
on consulting firms from abroad, for example, Jordan ".( P2-
A)
"... We did not have the technology need and trained personnel
for this strategic step the Bank tried to take.” (P2-A)
“For this decision, we had some problems, for example
technology problems. …To look into these problems, a Board of
Directors meeting was held. In that meeting, it was agreed that a
committee be set up.” (P3-A)
"For my bank, it was important that we analyse relevant
information. To be able to do that, we used the Engineering
Consulting Bureau” (P1-A)
"This was a new experience for my bank. We did not have a
standard information database. Also, we did not have the
needed technology. We therefore used the services of the
Bureau.” (P3-A)
“...We depended on the analysis of information in the reports,
cost analysis and information gathered which was based on the
study of Engineering Consulting Bureau.” (P2-A)
5.3.2 Personal Low Results from interviews show that personal judgement was not a
intuition Judgement intuitiveness critical factor for this strategic decision in the explored banks.
According to P1, P2 and P3, personal judgement was excluded in
this decision, that is, personal judgement was very low in making
this decision within the Bank. Both P1 and P2 believed that the
new technology decision was rational rather than intuitive, and it
was based mainly on economic reasoning. P2 believed that they
could predict that it would succeed, by relying on the results
achieved by other countries applying the same technology.
Past High P1, P2 and P3 said the previous experience of top managers had
Experience Experience
an important role to making this decision. Thus, the process of
making this decision relied heavily on previous experience, and
its role was very high. Both P1 and P2 indicated that the
experience is represented in education and previous professional
experience.
I High Care The Board of Directors was very keen on ensuring that no
mistakes were made concerning this decision.
5.3.3 Openness Low political Interviews with P1, P2 and P3 showed that: There was no
with each influence transparency amongst the Board of Directors concerning their
Political other about
Behaviour Interests and interests and preferences However, there was collective work,
Preferences consultation and expression of opinion between decision-makers.
Key behaviour transparency amongst decision makers concerning
their person al interests and preferences. Factors included values
and highest moral transparency.
According to P1 and P2, the Bank members shared the same aims
and have the interest of the bank at heart, due to this ‗values and
the highest moral transparency‘ point. Also, there were some
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“... This decision concerns particularly the banking sector and
generally the State, therefore the process of intuition is excluded
in this decision, and any mistake in making this decision will
bring a significant risk, thus the influence on the Bank's
performance will be negative”. (P1-A)
“... I think we did not use intuition, because the decision to
introduce the new technology was based mainly on scientific
methods to gather information and the necessary data and
analysis besides, experts from foreign consulting firms”. (P2-A)
“...Of course, experience is an important element in any
decision', Thus, all members of the Board of Directors had long
experiences and qualifications in the field of banking, this
experience permits all members to manage one of the biggest
consultation centres” (P1-A)
“... For example, the bank has used the experience of the
Director of Accounting in times of change decision, like
changing the process of the old accounting system to another,
without affecting the movement of bank accounts.” (P2-A)
“It was very important for us to be very careful in what we are
doing…..We were at the point of making a decision that
concerns a completely new way of doing things, and this
involved so much money being invested. Because we wanted to
make sure that the decision succeeded, we relied more on past
experience than on personal judgement.” (P3-A)
"There is no transparency amongst mangers concerning their
interests and preferences. And when we make this decision we
had to relate to the core of ethics, values and highest moral
transparency....in my opinion, in all the meetings and
discussions, there were cooperation between us and we had the
same aims and had the interest of the bank at heart”.(P1-A)
 cultural traits, such as collective work, consultation and
expressing of opinions between the Director of the Board and
members involved to making this decision.
( Researcher observation )
The lack of personal interest among workers in the bank also
became apparent through the researcher's observation within the
bank. The behaviour of some of the employees showed their
loyalty to bank A; for example there were no groups that aimed
to further their own interests, or who stated that there were some
managers who were looking to their own interests.
Power to Low political P1, P2 and P3 stated that (1) Managers do not use their power and
defend influence influence to protect their interests, (2) Managers have used their
Preferences
strength and formed alliances to protect bank‘s interest (3)
Managers do not hide information to protect their personal
interests, during DMP.
Bargaining High political Concerning this sub-theme (Bargaining among Decision Makers),
among influence two key analytical findings are pinpointed: According to P2 and
Decision
Makers P3, there was bargaining among decision makers about
identification of the budget for this decision. On the other hand,
as P1 noted, there was no bargaining between the decision-
Low political makers, because this decision was aimed towards the general
influence
interest of the bank. So in his opinion the political behaviour
influence was very low.
5.3.4 Decision High The results from the interviews showed that this decision was
Decision Importance importance highly important. P1 and P2 and P3 pinpointed four key issues in
Importance their response to this question. As respondents stated, the Bank
provided (1) adequate resources, (2) specialized and qualified
personnel, (3) staff training on the use of technology and (4) top
manager s took enough time for research and discussions to study
all aspects of this decision.
In responding to this question. P2-A even commented that they
got more benefits than anticipated from this decision.
102
“...I believed that the managers did not object to this decision,
and they strongly defended their position in meetings in order to
protect the bank‟s interest. Finally, the director of the board
adopted the idea of change... We can say that this decision was
necessary and relatively successful”. (P3-A)
“Some managers allied together and provided others with
enough information about the decision, e.g. they provided
adequate information to the committees of collect information,
and to the engineer office consultant, such as problems of daily
work which departments are facing , in order to help them to
make this decision." (P2-A)
“.... It happened that the executive of the project needed staff
with high efficiency to use this technology.... The financial
department objected to lending these employees.... this process
became a kind of bargaining among decision-makers about
identification of the budget for this decision, this decision cost
us many Millions of Dinars.” (P2-A)
“The staffs of this bank know the importance of using this
technology and the overall strategic decision. We all know that
the decision is for the general interest of the bank, so there is no
point to show political behaviour in bargaining.” (P1-A)
“Of course, this decision is very important.... this decision has
achieved a higher level of integration and connection between
different organizational activities and in linking the bank with
other banks, also in expanding international activities. Also
improved customer services and therefore reduced costs....
however this decision cost us much, as more time and resources

Subsequent High Due to the importance of this decision; As respondents stated
Decision importance other decisions that the Bank took included training courses for
staffs, providing new services, and creating a new department.
Another decision made is Islamic Murabaha.
Delaying this High The interviewees pointed out key issues relating to delaying the
decision Delay decision. In this context, P1, P2 and P3 identified two points
(Bank related and State related) of delay in making this decision
(introduction of the idea of the decision (new technology). For the
Bank related, these included the composition of committees to
study all the aspects of this decision due to the dominance of
public sector, lack of incentives staff and lack of competition
between banks. For the State related, there were several regulatory and
administrative constraints imposed by the Laws on state-owned
enterprises. And these resulted in a delay of the banking services to
customers, also a delay in transactions with local and international banks.
was required but at the same time we got more benefits than
anticipated from this decision" (P2-A)
“From our research it was very important to take this step as we
needed to connect to the international banking trend. … We
therefore made every effort and also invested reasonably into
the project.” (P3-A)
“Because this decision is very important, the Bank took careful
steps. I believe, so far, every step concerning the decision has
been well planned and followed. I cannot think of any
consequences.” (P2-A)
“The Bank invested much time and resources to this decision to
make it work. Training courses were introduced and a new
department created.” (P1-A).
“The Islamic Murabaha decision was also made.” (P2-A).
“I believe that the fact that there was less competition in our
Banking system made the Banks to relax and not to seek ways
for better service. Also, it took a long while to decide on the
committee to study the aspects of the decision.” (P1-A).
“The regulatory and administrative constraints imposed by the
law also contributed to the delay in making.” (P2-A)
“Honestly, this decision could have been taken years earlier, but
there were a number of reasons that contributed to the
delay…………. We are therefore happy that we have reached
this stage.” (P3-A)

5.3.5 Clarity of Low P1, P2 and P3 pinpointed two points relating to the clarity of “In our formal meeting we identified the required information
Uncertainty of kind of uncertainty information. First, they had full knowledge of all resources
the Decision Information
to be gathered concerning this decision....We had full
to be needed and required. Second, there was a clear policy for the knowledge of cost, time; ability needed and required human
collected action necessary to be taken for this decision. power for the project, and the implementation Company for the
national payments decision " (P1-A)

103
 Uncertainties P1, P2 and P3 stated that they had received notification of several “... I believed that not all procedures to be taken were
about the High of the procedures which should be taken during making this
Actions to be uncertainty
completely clear to us, so periodically we met with the Chairman
taken decision from board of directors of the bank. Therefore, they add and members of the Board Directors, and we debated the
that there was the complication in the application of the problems that were exposed. And there were some differences in
procedures which should be taken for this decision by others points of views on the procedures which should be taken, and
(such as, the General People's Committee and Central Bank of how we were able to address these problems, e.g. the bank
Libya). should have permission from the General People's Committee,
when related to the contract of the implementation company of
the project which needed a lot of money”(P2-A)
Difficulty of Low It was easy to predict results for this decision as indicated by both “... We did not find it difficult to predict the results of the
predicting uncertainty
P1 and P2 It appears that the process of new technology decision decision. We made some tests in some branches and
the outcomes
was very clear. In this connection, the bank followed scientific implemented them using the bank card system and the results
method in terms of identification of the problem, gathering and were positive. We found we provided quick service to customers
analysis of more information. They also added that the bank and got rid of the queues that used to be in banks, which
relied on the success of other countries that had successfully encouraged us to continue in making the decision.”(P1-A)
introduced it.
Motivation High The interview findings showed motivation to make the decision ".... I believe that this is to solve the administrative problems
for making motivation was very clear. P1, P2 and P3 believed that this decision was an
the Decision
such as increase the number of staff, due to reliance on older
opportunity not to be missed. The respondents identified three systems which are incompatible with the developments in the
points for this necessity: (1) To keep up with current banking sector." (P1-A)
developments in the global banking industry, (2) To be innovative
and introduce and diversify into new banking services, and (3) To
keep the customers and attract new customers. Further reasons,
P2 added are: (1) To improve the profitability of the bank, (2) The
Lack of good services for the bank's customers.
5.3.6
Decision
Motive

Confidence High According to interviewees, this decision was the right choice due
in Making motivation to fact that its main purpose was to develop and improve the
the Choice
bank‘s situation. Based on a number of reasons, P1, P2 and P3
believed that this decision was the right choice: (1) The
experiences of international banks in this area gave them the
confidence to implement this technology, and also through the
uniform standards between banks in world in order to avoid
accounting and administrative problems created by dealing
“... We were certain that we made the right choice because we
contracted McKinsey, one of the largest technology companies
in the world and which were of better quality with a strong
system of protection, and with more financial facilities”.( P1-A)
“We are confident that we made the right choice, because our
research shows us that things will work well if we implement
things like the Banks that have used the technology. Our Bank
was very committed to make the decision a success.” (P2-A)

104
 between banks. (2) This decision took adequate time in terms of
study, analyse of information collected and evaluated alternatives.
(3) The national payment system is implemented by global
company, one of the largest technology companies in the world.
In addition, P2 added that the decision was a right choice, because
there was increasing demand for new services which cannot be
provided through the old method.
5.3.7 Threat to Low hostility The interview findings show that the bank did not have any major
Environmenta Survival environment threat to survival. P1, P2 and P3 agree that the
l Hostility-
Munificence bank‘s environment was safe and stable. In their responses, both
P1 and P2 identified two (internal and external) factors for this
lack of threat. Internal factors - after adapting the new strategy to
developing the bank, efforts were made to restructure and develop
infrastructures of the bank. External factors - the new Libyan
Bank Law 1/2005 gave more powers to Libyan Commercial
Banks (e.g. restructuring bank and create new investments), and
helped to ensure to a certain extent the stability of the banking
sector in Libya. In addition, P1 and P2 believed that the Bank did
not face survival threat because (1) the bank is very rich in
physical infrastructure, (2) has good customer base, and (3) the
bank's products are well received and the Bank has a big market
opportunity
Stressfulness High hostility The bank‘s environment was stressful. P1, P2 and P3 agree that
the bank‘s environment faced severe pressure, and sometimes
hostile.
As P1, P2 and P3 noted, this was due to three points (1) Libyan market
cannot accommodate huge investments, (2) the large number of
procedures and complications of the administration in the business, (3)
Commercial Banks have a few investment opportunities in the Libyan
market. Another reason (4), P1 added, is the lack of good marketing
departments in Commercial Banks. Also they added, this is because
investment is controlled by the country‘s politics and the rules and
regulations published by the Central Bank of Libya
105
“We did not have a single doubt that this was the right decision
to make. ……. It was actually the way forward for us.” (P3-A)
“... Of course, we were confident that this decision was the right
choice and the target was very clear, this decision provided more
time for customers and employees of the bank, and better access
to good service at any branch in any city of the country without
the need for customers to contact the branch they opened their
account with. The customer can also access their balance,
details and dates of any transaction. They are able to obtain
cash instantly”. (P2-A)
“... In my opinion, the banks environment is very safe and still
stable after adapting a recent new strategy in the form of
developing the bank, and is considered to have no threats.....
Also, in my opinion we have enough financial and human
resources to achieve stability and growth for our bank".(P3-A)
“I believe the Bank has no major survival threat. The bank has
invested in personnel and infrastructure for the success of the
strategy. Also, there are a limited number of Libyan banks.”
(P2-A)
“...it is still the beginning for the bank‟s investments. The
involvement of private and foreign banks gave us an investment
opportunity. However, we are still at the beginning, because we
do not have the experience and are still preparing ourselves and
the qualified individuals we have for investment to a certain
extent in many fields, but not a wide expansion. Besides, there
are limitations from the Central Bank of Libya in terms of
investment” (P2-A)
“It is stressful understanding the new operating method. The
method is still new to us.” (P1-A).
 Dominance Low hostility Dominance of the bank on Libyan market does not exist.
of the According to As P1, P2 and P3 , this was due to four reasons (1)
Company
almost equal competition level among banks, (1) the largest
commercial bank is state-owned, (3) most banks offer the same
service, (4) technologically, all Banks were at the same level.
Also, by State law, no single Bank can control and manipulate the
banking market to its own advantage.
5.3.8 Product of Low certainly There was a high degree of predictability concerning product
Environmenta New Services demand and the preferences of clients. Not much was available
l Uncertainty
concerning new products‘ introduction before the new technology
based operation.
Competition Low certainly With regards to competition, the changes in competitors‘ prices
were predictable; due to the funding costs for banks, thus the
profit margin between banks was very low. P1, P2 and P3 stated that
the changes in the markets and changes in competitors' strategies were
predictable, due to (1) current mergers between the banks in Libya, (2)
reduction in the size of bank branches, (3) partnership with foreign
banks. Also both P1 and P2 reported that the entry of new companies into
the market was predictable, through two means (1) reports from Central
Bank of Libya and (2) the direct statement of competitors.
“... The activities environment in Libyan banking is still non-
expanding, and governed by the law and public policy; therefore
we cannot control the market because of our limited ability to
control the environment.” (P1-A).
“The Banking industry in Libyan is still largely controlled by
the State. Also, especially because of this new technology based
operation, no single Bank dominates the market.” (P3-A)
“... of course, we can predict these services, and they have been
well received by the Libyan market, and they have improved our
services and reduced time and costs for both the bank and our
customer.” (P3-A)
“... We needed to wake surveys of citizens and their desires,
where there was some ambiguity as to what extent this service
was acceptable and this may be attributed to culture and
banking law”.(P2-A)
“... The competition in Libyan commercial banking has no
effect on the Libyan market, because the market is oligopolistic
and characterized by the dominance of public sector control.
Despite the entry of foreign partners to the Libyan market, the
situation remains as before.” (P1-A)
“Personally, I think there is hardly any competition in the
Libyan commercial banking industry. Apart from high degree of
State control, there is hardly any innovation in the industry, and
customers have a limited service package.” (P2-A)

Government High certainly Both P1 and P2 stated that monetary policy can be very “...some Government policies, for example, monetary policies
al Policies predictable, while legal regulations affecting the business sector issued by the Central Bank of Libya, we can appreciate and
cannot be predictable. predict, due to them being clear and fixed policies. On the other
hand, I can say that other government policies cannot be
predicted, because the government may issue any decision at
could any time, and this could affect the bank.” (P1-A)

106
 Economy Medium P1, P2 and P3 believe that the bank could predict and appreciate
certainly economic conditions through the processes of economic reform.
5.3.9 Financial High According to P1, P2 and P3, financial performance is considered
Performance and Business Performance one of the most important indicators in the assessment processes
Performance
of their organizations‘ operations. In their view, the financial
performance of the bank was good enough to make this decision.
And they added that these indicators increased during the making
of this strategic decision. As the respondents noted, due to this
decision, there was an increase in (1) the total number of loans,
(2) the profits before tax and (3) the number of customers
respectively.
Organization High P1, P2 and P3 noted organizational effectiveness as an important
al Performance organizational performance indicator during the making of this
Effectiveness
decision. In this context, they identified that the operational
efficiency of the bank to make this decision was good in terms of
the exploitation of the resources available in the bank, enabling
them to control costs and performance and the quality of their
employees at different administrative levels.
Also P3 added that another indicator was social responsibility as
being a good measurement during the making of this decision,
such as the equality of opportunity between employees.
107
“... we can predict and appreciate economic conditions which
surround the bank, through the growth in money supply, for
example, the introduction of technology and providing improved
services to citizens (the use of machines); this procedure
persuades citizens not to keep their money in their houses,
which increases the deposits of citizens in the bank and thus
facilitates economic activity by increasing banking credit, which
increases further value of banking deposits.” (P2-A)
“... We can measure the level of performance of the bank in
terms of the return on assets, operating profits and market
share.... and the bank also had financial and human resources
which contributed to the success resulting from this decision."
(P2-A)
“The Financial position of the Bank was good, we were able to
fulfil all our obligations with companies that we had contracts
with, and we covered all expenses related to this decision: for
example, travel to other countries to get acquainted with this
technology. (P1-A)
“According to my vision, the efficiency level of proper
utilization of manpower and financial resources, it helped the
bank, for example, to reduce costs and time, and this increases
the expected value of the net proceeds from both inside and
outside the budget, and decreases the provision for doubtful
assets. Our staff felt much more motivated and satisfied because
there was equality of opportunity between employees. "(P3-A)
"I think we worked with all our energy in order to exploit the
available resources to reach the output." (P1-A)
5.3.10 Success in High P1, P2 and P3 identified three high level success of the decision: “... We can hopefully achieve 80% of the results. And the results
Decision Achieving effectiveness 1. Providing improved customer services such as easy balance
Effectiveness Decision
emerged from the first year ... By the end of this year we had
Objectives transfers, achieved 100% of our aims..... the results of this decision on
2. Enabling the opening of new bank accounts, decreasing transaction costs, for example, the bank using
3. Reducing operational costs. ATMs, which leads to a decrease in the number of employees
Also, P1and P2 identified two medium level success of the and branches." (P2-A)
Medium
effectiveness decision:
1. Reducing credits-based risks, “With the technology, we achieved reasonable risk reduction
2. Reducing risks of funds between the banks and und management issues with other banks.” (P3-A)
“Sure, there was initial resistance to change, which is to be
Also P1 and P2 added that they could measure the effectiveness expected. As times passed, things became better. Altogether, this
of the decision through decreasing transaction costs, or they could decision has been a success despites those problems….The
measure the profits resulting after a decision and compare with objectives were met.” (P3-A)
previous years. P3 added that the use of technology greatly assists “... Customers were encountering difficulty in opening bank
the bank in the expansion and diversification of the services accounts, due to the lack of using a new technology and
provided to customers, which in turn affects portfolio profits and difficulty administrative procedures.” (p1-A)
contributes to raising the efficiency of financial intermediation.
“... The level of profitability decreased from year to year before
(Research observation) making this decision, due to increasingly low volume of deposits
According to the researcher‘s observation within bank A, the and the number of customers of the bank. The current situation
bank managed to achieve their goals through making this of the Bank has led to a continuing increase in total deposits as
decision. For example, before the end of each work day the bank a result of the quality of banking services provided to customers,
was working on a settlement of accounts with other banks and thus this decision had contributed to increasing before tax bank
public institutions electronically, and this led to reduced costs and profits”. (P1-A)
time.

108
Hindsight High P1, P2 and P3 referred to (1) the time was appropriated in making
that the right this decision in terms of (A) the new Banking Law (1 / 2005), (B)
choice was
made opening the Libyan economy, (C) entry of foreign banks in
Libyan market, this requires from local Commercial banks to
develop them self to face potential competition In the banking
market. (2) This decision followed scientific methods in the study
of the decision in terms of actual compilation of information,
analysis, evaluate and the use of external expertise
109
“the foreign investment in Libya from 95% of the volume of
investment expenditures, which is about 5, 6 billion Libyan
dinars. In 2006, Libya announced a series of procedures which
are related to attract foreign capital.”(P1-A)
“... this decision changed many of the conditions inside the
bank, and this allowed the bank to be able to introduce new
services quick and continuously.” (P1-A)
"... of course, this decision was the right choice for the bank.
The bank changed completely... there was a need for our bank
to use modern technology for the development of banking
services; also this decision was a turning point in the banks‟
development history. This technology based banking made it
possible for our bank to have direct business operations with
international banks.” (P2-A)
5.3 Data Analysis for the Islamic Murabaha Decision in Bank (A)

Table 5.4: Data Analysis for The Islamic Murabaha Decision (Bank A)

Themes Variables/Su Activity Summary of Analytical Findings Specific Comments from Interviewees
b-Themes Level:
High/Mediu
m/Low
5.4.1 Identificatio High According to P5,P6 and P7, four key information types were collected: “…We had a meeting with the head of the committee and we
Procedural n of rationality (1) The requirements and needs of individual‘s service, (2) examining set the most important priorities for collecting information...
Rationality Information
Required the changes in the environment surrounding the bank which requires we took due time in collecting information about this
the interaction of the bank from the social, religions, economic and decision.” (P4-A)
political aspects. (3) the prediction of the market, and (4) the required “… I believe all administrations cooperated with the
facts about the financial costs for making this decision. Committee on gathering the necessary information by virtue
of personal relationships and the interest of the bank about
Documentation the problem from which the bank was suffering." (P5-A)
The researcher was allowed to look at the reports and minutes of the “As a member of the Board of Directors, I led a task force
meeting. that worked to analyse the plan for this decision and to
identify the nature of information required to ensure a
successful outcome of the decision. Sometimes we worked in
smaller groups before putting our ideas together.” (P6-A)
Decide High The bank relied on internal and external sources during the process of “…We have hosted one of the economic experts in Islamic
Methods of rationality collecting information, P4, P5 and P6 noted. Internal sources: forming a banking from our brothers in Qatar to give three days
Information
Gathering committee headed by a chief and five members of the bank managers, lectures about the pattern of Islamic profit system and the
and using questionnaires to collect information from the citizens on basis of converting to it. This can be done perfectly by
items and articles needed. Another source to get information, P4 added, combining all the aspects of Islamic law, credit, marketing,
was the formation of a committee for legal surveillance to make sure accountancy and administration. This program was directed
that the decision was taken according to Islamic laws and principles to all the staff in the main bank quarters and the branches.”
before its application. External sources: Islamic law (Koran and Suuna), (P5-A)
and the experts from Arab Islamic banks who have a long history in the
system of Islamic banking and profiting. Visits to Arab Islamic banks
(e.g., Bank of Jordan and Bank of Qatar) were arranged to study
Islamic banking.

110
Obstacles to Medium According to P4, P5 and P6 four obstacles were identified: (1) there is
Gathering rationality no advanced data base and information technology, the bank was still
Information
using old ways of collecting information. (2) shortage of qualified and
specialized personnel who can work in the Islamic Murabaha system,
(3) complex ramifications of the administrative procedures inside and
outside the bank; for example, (People‘s surveillance body and Central
Bank of Libya), and (4) poor infrastructure and communication
system.
Analyse High P4, P5 and P6 commented that the bank lacked advanced statistics
Relevant
Information
rationality skills and highly qualified personnel to analyse data. Also, they lacked
a data bases unit. Because of these, other odd information analysis
methods were used, such as, (1) pro forma financial statements
(financial ratios), (2) cost benefit analysis, (3) analysis of the financial
reports submitted by the accounting department which includes the size
of idle funds, and investments opportunities available. In addition (P4)
another method was (4) analysis of the opportunities and threats which
help reduce the risk involved in making this decision; establishing
priorities and providing a framework for evaluating the relative
importance of different decision objectives. This bank therefore used
the assistance of expert consulting companies for information analysis.
Crucial High According to P4, the bank had crucial information to make the decision.
Information rationality P5 and P6 stated that (1) the bank still needs more information in terms
Medium of (1) the Islamic Murabaha system, it‘s the bank‘s first attempt to use
rationality this system, and it should be in accordance with the laws of finance in
Islam, (2) the bank‘s staff need more awareness of Islamic Murabaha.
111
“…The current systems used at the bank are traditional
banking system unprepared to deal with the Islamic products
but in order to cope with competition and to achieve our
customers satisfaction, some programs were added to the
current bank system to be able to perform the Islamic system
of profit known in Islamic banks. This policy is
transitional until the bank adopts the permanent policy in
accordance with Islamic products.” (P4-A)
“…This problem has been discussed with the general Post
Organization but the communications are still weak and the
problem still exists and hasn‟t been solved yet.” (P5-A)
“…The information we have is enough at the first step to
start making this decision” (P4-A)
“But the bank still needs to improve our statistical analysis
tools and the knowledge among the staffs. This is also very
important for future measurement of performance.” (P6-A)
".... we still needed more information because we did not
previously have any information on the Islamic Murabaha.
There were a lot we did not know about the laws of finance
in Islam and the bank‟s staff still need more training, and
seminars and lectures on the basic concepts of Islamic
Murabaha"(p4-A)
5.4.2 Intuition Personal low According to P4 and P5, there was a lack of information in terms of the “I believe we used personal judgement to a reasonable
Judgement intuitivenes contrast of Murabaha with the resale of goods and articles according to extent in times of deciding on opportunities for investment
s the laws of Islam. These necessitated forming control committees to and also establishing departments for Islamic services.” (P4
examine the contract terms, and ensure that banks dealings are in line A)
with bank contracts. “As a member of the Board of Directors and a head of the
Medium According to P6 medium use of personal judgement was necessary committee, I was responsible for ensuring that the committee
intuitivenes when: (1) searching for investment opportunities to use available produces a good report that enables the bank take the right
s money, and (2) studying the decision needs in terms of establishing steps concerning this decision….. We analysed our sales
department of management specialization to provide Islamic services. records and contracts to make sure that they are ok with
Islamic laws, but we also looked at what other banks have
done, who use this Islamic Murabaha.” (P6-A)
High P4, P5 and P6 said that (1) most board members and managers had a “… Most of the managers have previous experience in
Experience long experience in the banking industry, but (2) the bank also used banking business and we rely on them in making this
Past
Experience outside experience from the Arab Islamic banks as well as special decision.” (P4-A).
experts in Islamic Law. “…We made a contract with Dr. Elsadek Abd Elraman
Also, P5 noted that (1) this decision had another side related to Algharyani and Dr. Usama Alsolabi. Both are specialized
knowledge of Islamic law, and (2) decision-makers had a shortage of experts in financial dealings from the legitimate side. They
knowledge about Islamic Law. also have experience and write works that discuss the
financial deals from the legitimate point of view in Islam.”
(P5-A)

5.4.3 Openness Low political P4, P5 and P6 are of the view that personal interests were not shown “...There was complete clarity and transparency among the
Political with each influence by the decision makers, rather all decision makers were concerned with decision makers. The layout of plans and targets that aim at
Behaviour other about
Interests and the higher objectives of the bank, which were to (1) increase the Bank‘s the higher interests of the bank were discussed regularly
Preferences market share, (2) introduce an Islamic way to provide new services, (3) during the periodical meetings. Exceptional meetings are
use the bank‘s available money to gain new customers and achieve held to discuss urgent issues and find suitable solutions for
financial gains, (4) target other segments of society who think that them.” (P4-A)
interest is forbidden. Thus, the decision-makers did not allow their ".......I believed that all the decision-makers with their
personal interests to influence their thinking. attitudes and views were concerned with the higher
objectives of the bank, and there was no place for personal
interests....... therefore when this decision was made, there
were effective consultations among the bank chairman and
the board of administration members as well as the
departments managers. Hence, the illegitimate and ill-
mannered implications around that decision were minor.”
(P6-A)

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 Power to High According to P4, P5 and P6 said that the Chairman of the Board of “…Sometimes the chairman of the Board of Directors
defend political Directors used his power and influence to: (1) establish administration
Preferences influence
imposes his influence in formal meetings and selects the
that manages the Islamic Murabaha to match the organizational perfect offer by companies which submitted their products to
structure of the bank, (2) choose qualified staff from the various the bank to contract with. So, some members approve of the
departments who have been trained in accordance with Islamic law, (3) chairman‟s views while others disapprove. Then, members
choose the best offers from companies for their re-sale. have different opinions sometimes disagreements increase in
the end. The final opinion is in the hand of the bank
chairman.” (P5-A)

Bargaining High In P5‘s view, there was bargaining between Board of Directors of the
among Bank and the Oversight Committee when making this decision
Decision
Makers concerning some of the conditions of the Islamic Murabaha.
Low political P4 and P6 believes there was no bargaining among Board of Directors
influence and Managers about this decision, for the reasons that this decision was
(1) a step to introduce new banking products, in order to achieve good
results and raise the bank performance, (2) considered a changing point
from traditional Bank to Islamic bank.
"I think the only haggling was a disagreement which
happened between the bank board of administration and
the Oversight Committee legitimacy about the items of the
conditions of the Islamic Murabaha that were illegal from
Islamic laws, so the committee refused them. This was a
form of haggling from the bank for the committee to accept
the terms of contract submitted to meet the conditions of
Islamic Murabaha.” (P5-A)

5.4.4 Decision Decision High P4, P5 and P6 stated that: (1) there was enough time to study the “…The importance of this decision is that it makes Islamic
Importance Importance importantl decision, (2) the bank spent a lot of time, money and effort, (3) this principles real in the life of the citizens. It works on the
y decision was to achieve the wishes of the law of a particular establishment of real Islamic society. Deepening the Islamic
community, which refuses to deal in usury. spirit among people is part of the decision and the role it
P3 also added: (4) the bank has spent a lot of money on staff training plays in society.” (P4-A)
which concerns the" Murabaha" Islamic system.

Subsequent High P4, P5 and P6 agreed that this decision is followed by other decisions
Decision importantl of the same importance. For example, the bank worked on preparing
y other decisions such as, (1) "Murabaha decision" which is under
examination and research, (2) a new department called the Department
of Islamic Murabaha within the organizational structure of the bank, (4)
Decision concerning staff training.
“…I think the following decisions are similarly important to
this one, such as the decision of musharaka and the decision
of Murabaha and they make new investments that will have
huge profits for the bank.” (P6-A)

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 Delaying this High P4, P5 and P6 identified 7 points that led to delay in the DM: (1) There “…We were a bit late due to some obstacles that the bank
decision Delay was no scientific reference, and the managers did not understand the branches didn‟t have enough data base for activating
Islamic Murabaha system, (2) lack of specialized personnel, with Islamic “Murabaha system”. But necessary arrangements
understanding of Islamic investment instruments, (3) administrative were made to solve this problem.” (P5-A)
procedure delays by the Central Bank of Libya, (4) long time by the "...We can say that these negative aspects came from a
Board of directors and members to study and discuss this decision, (5) weakness of the bank staff, specifically when the bank
differences in views between managers and the Oversight Committee started its work. That staff didn‟t have an accurate
legitimacy about the items of the conditions of the Islamic Murabaha, understanding of the legitimate affairs. In particular, what is
(6) The managers hid some information about this decision, (7) The related to the final form of Islamic “Murabaha “according
absence of a specialized department of the Islamic Murabaha in the to legitimacy of Islam that happened because the bank
bank. employed staffs who don‟t have any knowledge about the
Islamic Sharia.” (P7-A)
5.4.5 Clarity of High – P4, P5 and P6 suggest that the type of information to be collected about “At the beginning, we were very uncertain about the kind of
Uncertainty of kind of certainty the decision was unclear. The information type included (1) the correct
the Decision Information
information to collect, as we still trying to study the system
to be terms that should be available in Murabaha contracts to be in as was used in other banks. We were still not very clear of
collected accordance with Islamic Sharia, (2) the bank staffs to apply the what and how to be done.” (P5-A).
Murabaha system did not fully understand the legitimate regulations,
(3) the laws and political rules that regulate work inside the state. (4)
the internal positions of the bank to suit the new banking services was
not very clear (P4)
Uncertainties Medium According to P4, P5 and P6 there were uncertainties about the actions "During the periodical meetings, we discussed the
about the certainty to be taken concerning this decision, because there was/were: (1) conditions of the Islamic Murabaha contract. It was obvious
Actions to be
taken different views about the legitimate control committee and the bank that some information wasn‟t clear to comply with the
board of administration, (2) lack of clarity in some items of Islamic Islamic Sharia laws. This led to different points of views
Murabaha contract (3) inconsistencies in the tasks and responsibilities between the bank administration and the legitimated
between top managers and committee Shariah regarding the committee. So, we rephrased the conditions of contract,
foundations of Islamic Murabaha system. according to recommendations of the legitimate committee.
We also employed internal auditor and one of the bank`s
staff known to be highly professional and with a good sense
of Islamic legitimate awareness, to make sure that
"Murabaha" system is applied according to the Islamic
Sharia laws." (P4-A).

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 Difficulty of Low n their P4, P5 and P6 views, it was very easy to predict the effects of “Personally, I don‟t think it is difficult to predict the
predicting certainty this decision due to three reasons (1) the success achieved by the banks
the outcomes
outcome. This decision has worked for other banks, and my
that used Islamic Murabaha, (2) considerable time, effort and money bank has spent more time, and money to analyse it, so why
were invested in studying and analyzing the information for this will not work for us. I don‟t see any risk or unclear effects
decision, and (3) Libya is an Islamic state and its constitution is Islamic from the decision.” (P5-A).
law, therefore this decision will be accepted by customers. “We invested time and money into the feasibility analysis
and implementation of the decision, using past experience
knowledge. With all these, it was not difficult to predict that
the decision would be a success.” (P6-A)
5.4.6 Decision Motivation High P4, P5 and P6 stated that the motivation for this decision was high and “The motivation for this decision was very high. It was a step
Motives for making Motivation very clear. Both agreed that this decision was an opportunity for the that the bank had to take because of its importance to the
the Decision
Bank to: (1) improve its service package to its customers, (2) increase bank, concerning improving service package, increasing
the market share of the bank, (3) spread its risk and increase market share and improving its profit chances.” (P4-A).
profitability. In addition, P5 added another point (4) improve its social “There were a number of problems with our banking system.
responsibility standing to the community. As the interviewees also This Islamic Murabaha was necessary; because it will
mentioned, this decision also provides an opportunity to resolve enable us solve some of the problems in our banking
existing crisis by (1) providing a means for the customers and the system.” (P5-A)
community to buy goods, (2) elimination of usury, which is contrary to
Islamic law, and (3) employment of idle money.
Confidence High According to P4, P5 and P6 the decision makers were very confident "...There were alliances between the chairman and top
in Making Motivation about this decision and it was the right choice. This confidence, they
the Choice
managers to confirm and to issue this decision in the
explained was based on the fact that (1) this decision was based on interest of the bank............. we wouldn‟t spend all this effort,
scientific studies and research and cost analyses, (2) this decision relied money and time unless we were very confident of the
on Islamic Sharia. appropriateness of this decision." (P4-A)
"...according to the reports and information which we had,
this reiterated the success of Islamic banking and with
reference to the consultancy companies (Mackenzie) the
annual report in 2008 stated that the growth." of Islamic
banks increases by 20% every year." (P5-A)
5.4.7 Threat to Low P4, P5 and P6 note that the Libyan banking environment was safe and “I believe there were no threats to the survival of the bank,
Environmenta Survival Hostility never under any threat. The survival of their bank was not threatened: either from within Libyan or outside.” (P4-A).
l Hostility-
Munificence (1) there is low competition between banks in their service areas, (2)
there is limited financial resources available are in the banking market
environment, and (3) the Libya national economy is stable.

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 Stressfulness High P4, P5 and P6 suggest that there were opportunities for investment after “…The state has issued some laws and legislation to
Hostility issuing the new law No (1) 2005 which allowed Commercial Banks to encourage investment also, some restrictions imposed on
invest in financial assets and look for other investments. As they noted investments was cancelled. But the ratio of investment was
too, there are some bureaucratic complications caused by the Central determined by the Central Bank of Libya.” (P5-A)
Bank of Libya, for example, giving licenses to practice. Also, there “…We can say that all financial and human capacities are
were some restrictions by the Libyan Central Bank concerning the available at the bank. The problem is that the bank is
proportion of investment. All these factors caused increased stress. controlled with policies and regulations. This makes the
bank decide on some procedures because the bank should go
back to the Libyan Central Bank to have its agreement on
any procedures that relate to this decision.” (P6-A)
Dominance Low P4, P5 and P6 suggest that there were opportunities for investment after “.... I think it's difficult for the bank to control the market or
of the Hostility issuing the new law No (1) 2005 which allowed Commercial Banks to customers taste, or even the general policies of the state,
Company
invest in financial assets and look for other investments. As they noted even when the bank is state-owned. With these and other
too, there are some bureaucratic complications caused by the Central factors it is difficult to have a dominance of the market. No
Bank of Libya, for example, giving licenses to practice. single bank had a dominance of the market.” (P5-A)
Also, there were some restrictions by the Libyan Central Bank
concerning the proportion of investment. All these factors caused
increased stress; the bank couldn‘t guarantee a favourable surrounding
environment. They added that the bank does not have the ability to
control the market which was very limited and this service was new in
the Libyan market. Thus, there were some factors out of the bank‘s
control, for example the customers attitudes and behaviour and the
community culture. Moreover, P5 added there were policies and laws
which reflected the State‘s general policy which controls the Libyan
markets.

5.4.8 Product of Low According to P4, P5 and P6 , it was possible to predict the success of “…I think we could predict that this product would get the
Environmenta New Services certainty the new service (Islamic Murabaha), due to (1) citizens refusing to deal approval of the community. It will be easy for the Libyan
l Uncertainty
with usury and preferring to deal in accordance with Islamic Law, (2) citizens to buy whatever commodities they need in
citizens preferring to buy the product retail, (2) developing variety of accordance with the Islamic Sharia, and it solved a lot of
banking services. their problems.” (P4-A)

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 Competition Low P4, P5 and P6 emphasised that changes in the markets and changes in
certainty competitors' strategies were unpredictable, due to (1) competition is
limited in providing this service, (2) this service is a new product which
entered in the Libyan market. On the other hand, they emphasised that
it is possible to predict the entry of foreign banks.
Government Low P4, P5 and P6 stated that monetary policy can be predictable, due to it
al Policies + having clear and fixed policies, because the policy of the Libyan
High Central Bank is a conservative policy. On the other hand, legal
certainty regulations affecting the business sector cannot be predicted.
Researcher observation
During the time the researcher was meeting with the Director, he
showed her a letter from the Central Bank of Libya; the letter included
instructions that the bank must submit a detailed report on all
companies that the bank had bought goods from, and which the bank
would be selling to citizens under the terms of the Islamic Murabaha.
The letters also stipulated that the proportion of profit on these
transactions set by the bank could not be altered.
Economy Low According to P4, P5 and P6 the economic policies were predictable due
certainty to: (1) the clearness and stability of the economic policies in general,
(2) the government ideology currently followed is allowing the
restructuring of the economy, especially the bank sector. Moreover P4
added another point (3) the Libyan Law allows directing foreign
investment companies to invest in Libya.
5.4.9. Financial High For the Islamic Murabaha decision, P4, P5 and P6 reported that that
Performance and Business Performance
financial situation of the bank was good, basing their performance
Performance
judgement on the return on assets, operating profits and market share
during the making of this decision.
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“…Currently, this decision has no competition inside the
banking market of Libya. Our bank is the first ever to offer
such services. So, it can have the biggest possible share in
the market through offering the best banking service for the
benefit of Libyan community.” (P4-A)
“It is good for the Central Bank to regulate and coordinate
the industry, but the banks also need to be allowed some
freedom to allow for competition, which is good for the
market development. My hope is that this will be the case
when foreign banks start joining the Libyan banking
industry.” (P5- B)
“…The Islamic Murabaha decision is a kind of radical
change of the bank, and therefore we were worried that we
would not achieve the goals that we sought. Because it is
part of the current reform process in the banking industry
and Libyan economy in general, it is an economic reform
that makes opportunities for bank investment available. It
also offers new services for the Libyan community.” (P4-A)
".....I believed that government policies cannot be predicted,
because in some cases were decisions issued which were
improvised by the government, and this could affect the
bank.” (P5-A
“...The decision of Islamic Murabaha represented a new
kind of product in the Libyan banking market; it was likely
to make definite profits for the bank. Thus, to make this
decision, you should have a good financial standing. We
allocated a budget for making this decision, that we can
cover all the costs that we were needed." (P4-A)
 Researcher observation

While conducting observation within bank A, the researcher observed

that some employees were not happy about the New Technology
strategic decision in their bank. Nevertheless, they had to' do their best
to successfully implement that strategic decision regardless of their
opinion about it. Satisfaction as a criterion to measure success might
depend on the culture within which organizations operate.

Organization High P4, P5 and P6 stated that one of the organizational effectiveness “.... the employees were satisfied, due to that we adopted
al Performance indicators which was used to compare their bank with other banks were sound systems of performance evaluation, which were fair
Effectiveness
employee satisfaction, and efficiency of operations. for employees."(P4-A)
"Financial and human resources were available as well,
with the proper disposition of the exploitation possibilities,
and we tried as much as possible to minimize the costs."(P5-
B)
5.4.10 Decision Success in High For this bank (as reported by P4, P5 and P6), the objectives of the “I have no doubt in me that this has been a very successful
Effectiveness Achieving effectivenes Islamic Murabaha Decision where high level success was made decision. We are achieving our goals, for example,
Decision s
Objectives included (1) satisfying the needs of Libyan citizens and encouraging concerning keeping our customers happy with the Islamic
them to deal with banks according to Islamic laws (Sharia) from usury law based banking, and also making profits to keep us going.
Medium
(Reba), and (2) making profit for the bank to continue to perform …. We are also making progress in using up our funds
effectivenes favourably in the banking industry. On the other hand, medium success internally” (P4-A)
s was made in the areas of (1) coping with the level of competition with
other banks and offering new customer‘s services that have no “…Since we started the application of this decision inside
contradiction with Islamic laws of (Sharia), and (2) limiting investing the bank, it was met with warm welcome from the people
funds outside the bank, and using up idle funds. who rushed to purchase the different products they needed.
This attitude had some fruits in the Islamic Libyan
community which could get their needs from different
products away from (Reba) which is absolutely forbidden in
Islam; the bank made profits with good reputation, this
could keep the bank share in the market." (P6-A)

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Hindsight High P4, P5 and P6 agreed it was the right decision the bank has made.
that the right effectivenes They emphasised that there was a big change in the bank regulations
choice was
s which were, (1) more concentration on client‘s satisfaction, (2) change
made
of culture among the bank staff, not to look at themselves just as
bureaucratic clerks doing routine office and paper work but rather as
updated staff in charge of marketing and selling developed banking
services, (3) change of some legislation - the Central Bank of Libya
which has issued some laws to regulate the banking work. This has had
a great effect on the development of the bank services.
119
“From the financial point of view, this decision has
contributed a lot to this bank. Our customers are happier
with our service and our profits are increasing as a result of
this.” (P5-A)
“This decision has performed well in terms of providing
service to satisfy both the customers and the bank” (P6-A)
“... This decision has helped to transform the way things are
done in this bank. There has been a positive culture change,
minimization of bureaucracy, and our clients are much
happier with our service.” (P4-A)
“…We worked hard together, there were strong ties of
mutual friendship sometimes, we disagreed during
discussion but all of it was for the sake of the bank to have
success and achieve the objectives of attracting new
customers while keeping the current ones. The bank also
was successfully able to make accurate identification of the
customer real needs and desires. We got precise results
within one year after the application of the decision.” (P5-
Bank A)
5.4 Data Analysis for the Islamic Murabaha Decision in Bank (B)

Table 5.5 Data Analysis for the Islamic Murabaha Decision (Bank B)

Themes Variables/Su Activity Level: Summary of Analytical Findings Specific Comments from Interviewees
b-Themes High/Medium/
Low
5.5.1 Procedural Identificatio High The respondents (P7, P8 and P9) noted five points about the kind “… All data we obtained was in the form of either reports
Rationality n of rationality of information collected about this decision, namely to identify
Information
and correspondence or some facts and statistics we gathered
Required (1) the requirements of customer‘s new banking services, (2) the from the countries we visited. We compared the end results
changes in banks environment (social, economic and political of facts between Qatar and Jordan and on this we reached a
aspects), (3) the cost of transactions and commissions of Islamic satisfactory result regarding this decision.” (P8-B)
Murabaha to customers, (4) the desired goals of this decision “Our committee worked together, and the spirit of
(Islamic Murabaha), and (5) Islamic legislation that must include cooperation and collective construction of common ideas
in the Islamic Murabaha contract (P9) helped to create friendships among them. This helped to
determine needs and the nature of information concerning
. contracts, and how to ensure compliance with Islamic laws,
etc.” (P9-Bank B).
“…Islamic Murabaha committee formed by Board of
Directors of the Bank in order to gather information about
this decision and study the current status of the bank
according to all things related to Islamic Murabaha, for
example, individuals, training methods, determination needs,
contracts study and ensuring their constituency with the
Islamic Sharia, assigning one legal authority to deal with
and to revise contracts used by the bank.” (P7-B)
Decide High Collecting necessary information and accurate diagnosis of the "…Some information was collected based on external
Methods of rationality
decision was important, P7, P8 and P9 noted. Respondents sources. Formal visits were organized to Arab banks
Information
Gathering identified internal and external sources of gathering information.. implementing the same system, such as Jordanian Islamic
Internal sources: (1) a study previously prepared by the Marketing Bank and Quatrain Islamic bank." (P8-B)
manager, (2) using inquiry forms to gather people‘s opinions
about this decision, (3) Committee of the Islamic Murabaha.

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 Obstacles to Medium P7and P9 noted tow points: (1) the lack of ground rules and
Gathering rationality sophisticated electronic information, as the bank still relies on
Information
traditional methods to collect information, (2) a lack of trained
staff with full knowledge of Islamic legislation. P8 stated that (1)
complexity of administrative procedures within the Bank, and (2)
the need to refer to the Central Bank of Libya and taking
statements on all measures relating to the collection of
information on this decision.
“At the present time, we still rely on traditional methods to
collect information, which has a negative impact on the time
taken for decision-making. The collection of information
takes us too much time, in addition to the complexity of
administrative procedures within the Bank or outside the
bank” (P9-B)

Analyse High According to P7, P8 and P9, collected information was analysed “We mainly analysed relevant information by using
Relevant rationality
through the analysis of preliminary information which was used accounting metrics. We need to invest in more modern
Information
in (1) analysis of financial ratios such as the balance sheet and a multi-purpose tools, especially concerning the Islamic
list of savings, (2) cost benefit analysis, (3) analysis of the Murabaha, as done in many countries that practice this
financial reports which includes the size of idle funds, and system.” (P8-B)
available investments opportunities, (4) comparing the results of
the facts and figures that have been collected from countries using
the Islamic Murabaha system. Also the strengths and weaknesses
of Murabaha decision were analysed (P8).
Crucial Medium P8 and P9 stated that the bank had crucial information that “... I believe we were able to collect decisive and final
Information rationality enabled them make the decision. But the bank still needed information required to make this decision, in my opinion, it
additional information; the bank‘s staff still lacked awareness of is related to the infrastructure of the bank and preparing
Islamic Murabaha and how to deal with Islamic investment suitable individuals to work with the system of Islamic
instruments. Murabaha.” (P7-B)
Low According to P7, there was a lack of information about
rationality conditions that must be met in the Islamic Murabaha contract
between the bank and the companies that own the scheme, for
example, there must be documentary proof of transfer of
ownership to the bank, and where to store after Bank Ownership.
5.5.2 Intuition Personal Medium P8 and P9 said, the decision was adopted on the basis of logic and “… We thought that as a result of the large success
Judgement intuitiveness scientific methods, as a result of the success met by the Arab achieved by Arab Islamic Banks, such as Jordan and Qatar
Islamic Banks. P7 stressed that this decision was based (1) Islamic Banks which deal on the Islamic Murabaha basis,
entirely on the collection of the required information, (2) we thought that we could meet the same success, as they
Low
scientific study on the collected facts, (3) estimating the material achieved, in developing the level of our banking services to
intuitiveness
costs and human resources needs, and (4) it took two years the customers.” (P8-B)
research and discussions to make a decision for Islamic
Murabaha.

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Past Medium P7, P8 and P9 stated the decision required from the managers
Experience Experience involved full familiarity with the Islamic jurisprudence and
Islamic Sharia. But most of the managers in charge making this
decision lacked full knowledge of Islamic jurisprudence laws.
Therefore external expertise assistance was required from Arab
Islamic Banks, such as (1) those in Qatar, and (2) specialists in
Islamic jurisprudence from inside the country.
5.5.3 Political Behaviour Openness Medium P8 and P9 note that there were different directions and opinions
with each political between the Board of Directors and the members during the
other about influence
Interests and meetings, but these differences were limited and for the good of
Preferences the bank. The dominant authority within the bank was the
Chairman of the Board of Directors who has the legal power to
direct and influence the role of the participating members.
In their view P7 there was not transparency between the Board of
Directors and the executive managers during the meeting and
Low political discussions. All worked for the goal of the decision, which was to
influence benefit the bank and not for personal interest, they noted. The
bank wanted to (1) introduce new products to the customers, and
(2) work to solve social problems, such as the refusal of
individuals from dealing with interests.
122
“... The Islamic banks have had success with this decision
and their banking activities according to Islamic laws at the
same time. They achieved great success at the level of
offering services or gaining profit.” (P7-B)
“…..the managers lacked experience in making this
decision and the decision requires a greater knowledge of
Islamic law. Thus this decision required experience in other
aspects, such as Islamic Sharia, therefore we used the
experience of some auditors who had extensive experience in
Islamic Sharia. However, this was not enough, because we
also needed to have staff familiar with Islamic law.” (P7-B)
“... during our meeting with the Chairman of the Board of
Directors of the bank, different views and directions
appeared about the basis for choosing the optimal offer from
the companies which own the products. Again some opinions
were united while others were different and alliances formed
between the members. But after discussion, the Director-
General of the bank decides as he is the highest authority in
the bank.” (P9-B)
"... In the meetings, the Director-General of the Department
provides all the papers and listened to all opinions and
trends on all the offers of goods offered by companies in
order to identify any goods which were acceptable to
consumers, (as well as taking the Islamic Fatwa opinion in
offered conditions by bidding companies). Do these
conditions contravene the Islamic law or not? ... After
hearing all the opinions, the Director-General will decide
which offers are the most suitable to contract.” (P8-B)
"... At the beginning of our work to pass this decision, we
used our strength in order persuade to get approval from the
Central Bank of Libya for making this decision. This is
because we are under the supervision and influence of the
Central Bank, which has the right to issue laws and
legislations for all Libyan banks to work with. Therefore the
main aim of this decision is the banks interests and
preferences and not personal ones.” (P7-B)
 Power to Low political P7 noted that (1) the decision makers did not use their power and "............ I believe that the legitimacy of the board plays an
defend influence authorities to protect their interest; everyone worked for the
Preferences
important role in the meetings held on the ground, which it
benefits of the bank, (2) the committee of the legitimate authority is a responsibility shared with responsible management in
has an important role during the meetings as it was jointly applying the provisions and principles of law, it was trying to
responsible with the administration in applying the provisions and make this decision matching the Islamic law and the offers
High principles of Sharia in the Islamic decision. should adhere to these principles.” (P7-B)
political P8 and P9 however noted that there were some personal interests “....... These differences of opinions are very important and
influence in some elements of this decision regarding bonuses, extra time, very neutral. There were differences regarding travelling
L travelling abroad and promotions available to the decision abroad and who are the suitable candidates and suitable
makers. international banks.” (P8-B)

Bargaining High According to P7, P8 and P9 there was bargaining among the "......... I believe that there were differences in opinions,
among political managers on the core decision subject, about perfect because of complications in procedures in this decision. This
Decision influence
Makers organizational basis that defines responsibilities between Board of was due to that the organizational aspect, since the bank had
Directors of the Bank and the legitimate committee as all decision a deficiency in perfect organizational basis that defines
makers worked for the goal of the bank. responsibilities, between Board of Directors of the Bank and
the legitimate committee. Thus, this created differences in
opinions, and caused bargaining among them.” (P8-B)

“It is normal that different people will show different

opinion, and this will lead to some bargaining. However, in
this decision, effort was made to ensure that every
bargaining step was in agreement with Islamic law.” (P9-B)

5.5.4 Decision Importance Decision High Concerning the importance of this decision, P7, P8 and P9
Importance importantly mentioned important points about the decision (1) has controls
and legitimacy of certain restrictions to prevent the involvement
in usury, (2) expands the circle of the bank activity inside and
outside the country, which took a lot of time, effort and money,
(3) enabled changes in the ways and methods of practicing the
bank activities.
Documentation
The researcher was allowed to look at some reports such as:
costs of making decision and problems related to financial
resources
"... I think the importance of this decision lies in changing
the direction of the bank activity, from a usury bank to a
bank which deals according to Islamic Sharia. This has led
to activate the investment and development and benefiting by
the owners of investment deposits to run their money
through legitimate methods. The buyers also benefited by
paying the selling premiums through periods of time in the
future. This increases the bank‟s activities to such a large
extent which enable us to meet the insurance of goods for
the people inside the country or abroad." (P8-B)

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 “This decision was necessary because Libyans have wanted
to have the Islamic Murabaha. They therefore received it
well when it was introduced, as it was based on Islamic
law……. Currently, we are in the process of identifying
further strategic decisions to make. To help in that plan, we
have set up marketing and accounting committees to work
separately and analyse our performance so far, and also
come up a plan concerning strategies to better our services
and response to the customers and general public.” (P9-B)
Subsequent High P7, P8 and P9 stated that this decision should be followed by "... We are preparing another decision with similar
Decision importantly subsequent decision of similar importance, such as, "Musharaka importance for “Musharaka decision”, speculating decisions
decision". and new department called the Department of Islamic
Murabaha and following the Murabaha decision..... The
bank is seeking to provide this new service in order to
increase our market share, to provide opportunities for
investment and to be more competitive." (P8-B)
Delaying this High + P8 and P9 identified obstacles, such as: (1) the high profit margin “... There was some delay in making this decision, for
decision Medium stated in the contract prepared by the management of credit risk, example there was a difference in opinions about the value
Delay (2) complaints of some sections because of labour shortages and of the profit margin stated in the contract. Therefore, we
the lack of facilities, and (3) the measures imposed by the Central have to reach for a solution to provide the item to the citizen,
Bank of Libya to request permission before performing and at the same time, reasonable profit margin for the
everything related to this decision. Moreover P7 added reason (4) bank.” (P8-B)
tax revenue and its negative effects on citizens.

5.5.5 Uncertainty of the Clarity of Medium P7, P8 and P9 stated that there was Lack of clarity about (1) some “... There was some unclear information related to the terms
Decision kind of certainty of the information related to the contract terms, the bank gets of the contract, such as the necessity for the bank to show its
Information
to be assistance from Qatar Bank helped to clarify some of the seriousness in buying the commodity and to own it by paying
collected information related to the contract terms. Also, another problem its price to the seller immediately after the agreement on the
(2) was that the bank staffs did not fully understand the legitimate contract. Thus, few differences and a disagreement of
regulations. So, the Qatar Bank offered training sessions to help opinions appeared among the management of the bank, the
them understand Islamic Murabaha system. members and the legitimate committee during their official
meeting. Therefore, the legitimate committee has submitted a
report which reviewed the required proposal for reforming
some terms of the contract to match with Islamic Sharia.”
(P7-B)

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 Uncertainties High P7, P8 and P9 identified four points of uncertainties, (1) different
about the certainty views and lack of clarity in some items of Islamic Murabaha
Actions to be
taken contract, (2) lack of job descriptions for all departments in the
bank, (3) regulatory and administrative constraints imposed by
the laws on the banks, and (4) negligence by Libyan government
to encourage Islamic Murabaha system.
Difficulty of Low P7, P8 and P9 stated that this was considered as new evidence “... till this moment all indicators are positive about the
predicting certainty for the validity of applying Islamic Sharia at any time and any outcomes of this decision and there was no difficulty in
the outcomes
place, (2) where the need of people was verified and led to predicting the results. The decision helped us to solve the
activate investment and development. Moreover, P8 stated that problem of the people, we got new customers, we made
the bank spent time and money in studying this decision in order profits for the bank and we started to develop the competitive
to facilitate its success. capability of the bank.” (P8-B)

5.5.6 Decision Motives Motivation High According to P7, P8 and P9 the Islamic Murabaha decision was “... The decision gave solutions to many problems suffered
for making Motivation important because: (1) the bank needed to expand in its services, by people. Therefore, we are going to continue the creation
the Decision
(2) it will enhance the efficiency of financial intermediation, (3) it of new products that‟s helped the people and at the same
will encourage investments and development projects, and it will time achieve a profit to the bank and increase our market
help to solve the problem of the refusal to deal with interest shares.” (P7-B)
because it‘s contrary to Islamic Sharia. “We had a clear motive, that is, to reach out better to the
customers and give them better service. We also made sure
that our investments into this decision would yield benefits to
the bank.” (P9-B)
Confidence High P7, P8 and P9 were confident that it was the right choice to make “… I think we were very confident about the validity of this
in Making Motivation this decision due to (1) the decision was based on feasibility study decision because it was the first new product provided to the
the Choice
and research, and cost analysis, (2) the decision is not contrary to Libyan market according to Islamic Sharia and has helped
Islamic Sharia and has received acceptance from the whole many people.” (P7-B)
society, and (3) this decision had low-risk and it also increased
profitability.
5.5.7 Environmental Threat to Low P7, P8 and P9 did not think there were threats to the survival of “In general, we can say the Libyan banking environment is
Hostility-Munificence Survival Hostility their bank. According to them: (1) there is poor competition a safe environment due to policies and laws that govern the
between banks in producing this service, in terms of the variety of law of Libyan banks by the Central Bank of Libya. I must
tools in the Islamic banking services, and the level of skills of say, for my bank, there was no element of threat to survival"
staff having new and good skills in Islamic banking, and (2) the (P7-B).
new banking services (Islamic Murabaha) encourage segments of
society to deal with banks, who see interest as usury in Islam.

125
 Stressfulness High According to P7, P8 and P9, there was high stressfulness, because
Hostility (1) the Central Bank caused some bureaucratic complications in
the process of obtaining licences. These complications cause the
banks too much stress and have a negative influence on the
performance of the bank.
Dominance Low Their bank does not dominate the market P7, P8 and P9
of the Hostility emphasised. According to them, some reasons in this connection
Company
are: (1) the bank is governed by Central Bank policies, and also
influenced by State decisions, (2) the level of efficiency of
workers in banks is very similar, to provide these services
(Islamic Murabaha), and thus does not allow any bank to control
the Libyan market.
5.5.8 Environmental Product of Low In their responses, P7, P8 and P9 pointed out that the new service
Uncertainty New Services certainty (Islamic Murabaha) will be well accepted. They sounded like they
can predict the tastes and preferences of customers. P7 and P8
commented that: (1) this service has wide acceptance by members
of the community due to the desire of individuals to move away
from dealing with usury, as God said [Allah has permitted trading
and forbidden usury (Al-Bakara 275)], to provide some banking
services for customers' bank, such as buy retail.
Competition Low P7, P8 and P9 noted that: (1) the provided service is considered as
certainty a new product with no competitor in Libyan banking
environment; (2) increasing competition in the market, in the light
of economic developments, the situation required from us to
introduce new services, such as Islamic Murabaha decision; (3)
the new banking Law (1/2005) allows foreign banks to open new
branches in Libya, so many Islamic banks are waiting for this
opportunity to invest in Libya, this will cause more competition
with local banks; (4) also the new banking Law (1/2005)
encourages Commercial Banks to create new investments, thus all
the Commercial Banks are developing new strategies.
126
“In my opinion some of the guidelines defined by the
Central Bank were too strict and caused my bank some
stress. For example, there were strict processes for obtaining
licence to practice, and permission has to be obtained at
each stage of this decision.” (P8-B).
“The way the Libyan commercial bank industry is
structured, no single bank can have dominance. The Central
Bank regulates the industry through its policies, and
financial limitations also prevent such dominance.” (P8-B)
".... We were expecting this item to receive acceptance from
individuals in society because it‟s going to facilitate the
receiving of this item and considering social service, at the
same time, as it will solve many problems for them." (P8-B)
“This new decision is a good step in the Libya banking
industry. I believe our bank will have a good experience with
it because the Libyan people are happy with the „Islamic
Murabaha‟ decision.” (P9-B)
"........ I believe that the policies of competitors are usually
clear for us because of the lack of investments and the
policies that govern the banks are also clear. Therefore, it is
possible to say that for this service there are no competitors
now in the Libyan banking market." (P7-B)
“Presently, there is not much competition in the industry,
but I expect this will change in a short time, as there is a
high possibility that foreign banks will try to penetrate the
Libyan banking industry.” (P8-B)
 Government Low P7, P8 and P9 noted two points in their responses: (1) the bank is
al Policies + under the control of laws and policies issued by the Central Bank
High of Libya; (2) There is no constancy in laws of the governmental
certainty policies.
The researcher was allowed to look at the official letters from the
Central Bank of Libya include recommendations and procedures
that must be followed during their making of the decision. In
addition, this situation prevails for all banks and all five decisions.
Economy Low P7, P8 and P9 suggest that: (1) Libya is currently reforming the
certainty banks sector to match the economical development in the country.
Thus, this decision is considered as a type of investment
opportunity which contributes to the development of Libyan
economy; (2) the Murabaha decision represents an investment
opportunity in Libyan banking market and it is in agreement with
the ongoing reforms in Libya. In general; (3) Libya is following a
predictable economic policy, because it is consistent with banking
development.
5.5.9 .Performance Financial High From the interviews with P7, P8 and P9, it was agreed that during
and Business Performance the making of this decision the financial and business
Performance
performance of the bank were very good compared to other
banks. These financial indicators were return on assets, operating
profits and market share. They added that the financial situation
of the bank was considered strong through a number of indicators
(1) facilitating elements like the management of grants and loans,
and the development of their Islamic methods in banking, (2)
reducing the risk of money outside the bank, (3) increasing
savings and money by attracting new customers, and (4)
increasing market share (P7).
Organization High In the views of P7, P8 and P9, organizational effectiveness was
al Performance one important indicator that enabled them to compare their
Effectiveness
bank with other banks, similar in size and business, and among
these indicators were, for example: (1) employee satisfaction:
(2) the efficiency of the bank's operations.
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" ..... I believe that despite the current economic opening in
Libya, still the laws of the state control the investment
opportunities. Although this decision is based on statements
issued by the government, we are still having no freedom to
choose the type of investment activities preferred by the
bank." (P8-B)
"....... the growing fierce competition in business would force
us to be concerned about the development aspects to retain
our share in the market. This intern requires renewal and
continuous innovation of the various tools in bank
procedures to increase the productivity and reduce the costs.
Again, this will requires innovation and creation of highly
skilled staff in technical, administrative and other fields."
(P7-B)
".... in accordance to the bank balance sheets, the capital of
the bank had a strong balance sheet, and, the market share
of the bank was on the rise."(P8-B)
“Our staff showed satisfaction with incentives provided to
them and equal opportunities between them. However, there
was some dissatisfaction by some employees; this was maybe
a result of the disparity in level of education. But we always
tried to solve these problems and make them happy. (P7-B)
“We as a team, we worked for this decision. This decision

5.5.10 Decision Success in High P7, P8 and P9 pointed to several successful goals: (1) providing
Achieving
Effectivenes effectiveness the Muslim customers a safe place to keep their money and
Decision
Objectives investments and away from the suspicion of usury, (2) providing
new banking services of high standard to customers in line with
Medium
effectiveness
the provision of Islamic Sharia, (3) attracting many new
customers, by using Islamic Sharia in banking services, and (4)
reducing the migration of money or leaving it to be handled
outside the banks (P9).
( Researcher observations)
the researcher observed that the Bank B achieved the goals of the
Murabaha decision, through observation, the researcher noticed
that there were a large number of citizens who wanted to buy
goods using Islamic Murabaha finance, during the researcher
conduced interview with marketing director, the marketing
director received an order from a Service company asking for a
range of goods to be paid for under this system. The marketing
director also said that the bank was barely able to provide for its
customer requirements due to the demand, and this was confirmed
by documents found on the sale of goods under Murabaha Islamic
finance decision by the researcher.
128
needed efficiency at the work to make it. Praise is to Allah,
due to having mangers of departments having more
experience and efficiency in using the financial and human
resources in the best way.” (P9-B)
“This decision opened the door to new and improved
banking services. …..Because the decision was based on the
Islamic Sharia, we could gain more easily the confidence of
the large Muslim customers. As a result of this, we made
profits and improved our services.” (P8-B)
"...... the bank seeks to achieve a growth rate and to remain
in the banking market. In order for the bank to do so, it is
necessary to continue and compete in this market. On the
other hand, for the bank to achieve its objectives, it must
spread so as to reach different segments of the society and
provide banking services for customers to their nearest
places. This goal can only be achieved through geographic
spreading in communities." (P7-B)
"...... As I think, the current banking work always needs to
be renewed and there needs to be innovation of new banking
services and marketing. This is due to the need of customers
for continuous innovation of the moral and material
requirements, and also because competition started in
Libyan banking market to gain the most possible
customers." (P8-B)
" the bank provided new services for society. The bank
thus introduced the new product for customers reluctant
to deal with the bank, because they think of it are a usury
based-bank; through this, the bank increased the volume
of deposits from the customers." (P9-B)
Hindsight High This was the right choice, P7, P8 and P9 noted. This, according to
that the right effectiveness them, is due to the following reasons: (1) since the banking
choice was
made service was based on Sharia law, the bank was able to attract
many customers, (2) the bank got contracts with good companies
to provide quality products, to meet customers‘ satisfaction, and
to sell all the products in the maximum time possible, (3) using
the provision of Islamic Sharia, the bank cancelled the interest,
which is avoided by many customers away from suspicion of
usury, and (4) in the light of this decision there were
establishment changes in the policies and business rules, and
providing new banking services to customers (P9)
129
"............... Many offers have been provided to us by
different companies to participate in this investment. These
offers were domestic or from abroad, such as those from
Qatar and Egypt, in addition to the many requests from
citizens interested in purchasing goods." (P7-B )
“This is one of the best decisions that we have made since
the beginning of this bank. With this decision, there were a
lot of positive developments that followed in the bank. Our
customers were even very happy with our banking
services.” (P8-B)
"...... As I think, the current banking work always needs to
be renewed and there needs to be innovation of new
banking services and marketing. This is due to the need of
customers for continuous innovation of the moral and
material requirements, and also because competition started
in Libyan banking market to gain the most possible
customers." (P9-B)
5.5 Data Analysis for Training Decision (Bank B)
Table 5.6: Data Analysis for Training Decision (Bank B)
Themes Variables/Sub- Activity Level: Procedural Rationality: Summary of Analytical Findings Specific Comments from Interviewees
Themes High/Medium/
Low
5.6.1 Identification of High P10, P11 and P12 pointed out four points for the collected ".... Of course there is a neede to change the system and
Procedural Information rationality information these are (1) to identify the training needs of
Rationality Required
conditions of employment for the possibility to identify the training
departments depending on the regulations of banking. This process requirements, rules, regulations and laws in force within the
should highlight issues such as staff inefficiency, (2) to identify bank". (P10-B)
which staffs of the bank requires training, (3) to study, analyse and “To make sure that our training decision had any chance to
evaluate the companies offering training, and (4) to identify the succeed, we first analysed our internal environment to find out
desired goals of this training. who needed what and where and how. …. Then we consulted
people and banks with similar training experience. Then we
applied the knowledge we gained to our situation and monitored
things regularly too, to see if and when things needed to be
changed.” (P12-B)
“…As I think we acquired adequate information which enables us
to make this decision. For example, we needed to know everything
new about the modern means of training and whether they are in
line with the capacity of the staff and the degree of accepting the
training processes by them.” (P11-B)
Decide Methods High According to P10, P11 and P12, their bank gathered information “…We also depend in collecting the information on the organized
of Information rationality by: (1) examining all the training requirements for employees, official visits to the Arabic banks to have an idea about the latest
Gathering
reports of staff performance and efficiency, (2) examining methods and techniques used in training programs for the staff,
committee reports, (3) study the offers submitted by the companies, and the possibility to apply them in our bank. We sent a group of
and (4) using Consulting Bureaus and visiting Arab and foreign employees accompanied by the director of training to the Arabic
countries who have used such training. bank of Jordan for 15 days. Again, the staffs were selected from
those who are close to them, only those with whom they have a
The use of documentation was another method to collect the data of personal relationship or kinship.” (P10-B)
this thesis, in addition to semi-structured interviews and participant
observation. It provided a greater amount of information as well as
supplying more reliable and in-depth data. The researcher was
allowed to look at some documents regarding contracts with
specialized companies for staff training.

130

Obstacles to Low The obstacles, as P10, P11 and P12 reported, are: (1) shortage of
Gathering rationality qualified professionals to collect required information, (2) lack of
Information database to facilitate the process of collecting the information. (3)
Weaknesses in communications systems infrastructure and links to
the bank via the internet. Moreover, P10 added another obstacle,
namely: The number and complexity of administrative procedures
within and outside the bank. Due to these obstacles, the bank
directors rely on external consulting firms for collecting
information.
Analyse High In addition to the obstacle listed above, P10, P11 and P12 noted
Relevant rationality that the bank did not have the means of analysing data on its own.
Information Therefore, the bank depended on consulting firms for the analysis
of the information. Also, the bank used simple analysis methods:
(1) examining the reports submitted by the committees and
discussing them in the formal meetings, (3) studies of the
economical feasibility, (4) cost benefits analysis.
The researcher was allowed to look at some documents regarding
contracts with specialized companies for staff training.
Crucial High P10 and P12 emphasised the success of the managers in reaching
Information the basic and critical information for making this decision
Medium P11 stated that some time additional information is needed in
rationality making this decision, such as, (1) the future trend of the employees
to continue working at the bank, (2) the willingness of the person to
accept training programs.
131
“…We met with the President of Board of the bank and we talked
and decided to form an internal committee consisting of a number
of the staff headed by the Director of training and management.
We asked this committee to collect the information by the help of
other departments and sections, and to prepare a report explaining
the required level that should have been reached by the employee
and the type of needed training. The managers cooperated among
themselves to collect the information and data. They had known
each other a long time in the field of their work.” (P11-B)
".... I believe that the required information was collected to make
this decision, and the problem experienced by the bank was
identified as the lack of staff for advanced training programs on
mechanisms of banking business". (P10-B)
“…We did not have advanced statistical means for data analysis.
The analysis which we depend on as a bank was the discussion of
reports submitted by the committees, those which have been
created, and the reports submitted by various departments.
However, the total dependence in the analysis of the information
was on the consulting firms and the study of each alternative
alone, and then selection of the best alternative.” (P10-B)
".....Through our past experiences, some staff had been subjected
to training programs, who then moved to work with others. This
caused us a loss of time and money, therefore, the future
predictions of the staff are hard to predict.” (P11-B)
 Personal Medium P10, P11 and P12 agreed that personal judgment was not a major
Judgement intuitivenes factor in making this decision. They cited four points which made
s them not depend on intuition for making this decision: (1) This
decision depends entirely on a scientific method for gathering
information and facts. (2) This decision uses this scientific method
to identify training requirements. (3) To study the required financial
and human costs. Moreover, P10 added another point, (4) to study
the requirements of an environmental and marketing banking. In
spite of that, the respondents also stated insufficient information;
the top managers did not use on their intuition to making this
5.6.2 decision.
Intuition Past Experience High P10, P11 and P12 emphasised that experience played a major role
intuitivenes in making this decision, and its role was very high on the process of
s making this decision. They have strengthened their point of view by
saying that, (1) the experience is represented in education and
previous professional experience, (2) the bank depend on the
experience of Arabic banks, like Lebanon and Jordan, in selecting
the modern and sophisticated training methods
Openness with Low P10 and P12 stated that, there was a convergence of views among
each other about the board of Directors and the managers about the bank‘s interest,
Interests and in terms of improving the level of employees and their work skills,
Preferences and improving the quality of banking services.
High
political P11 stated that, there was a presence of transparency among top
influence managers regarding their personal interests, concerning e.g. training
abroad, and the tangible and intangible benefits
5.6.3 Political
Behaviour
132
“Of course we had some lack of information, as for example, some
of the staff did not accept the training programs. This might be
related to their education or they do not want to change…clashing
of the manager‟s duties and responsibilities as a result of the
unclear old administration regularities.” (P10-B)
“Of course experience played a very effective role in making this
decision. The members participating in making this decision were
found to be sound in previous experience in the field of banking,
having not less than 20 years and holding scientific
qualifications....... but we still wanted people who had more
experience related to this decision in terms of identifying training
needs. We still felt we had inadequate experience and this made us
concerned about taking the correct decision; therefore, we used
the aid of a few experienced individuals in the field of banking
business from other banks, especially those who had a very good
history in this field.”(P12-B)
“… I am very sure that the objective of making this decision was
for the interest of the bank and not for personal interest. But there
is a common ground and convergence of views among the Board
of Directors and managers of the bank concerning their
preferences and interests. This resulted in the creation of
atmosphere of trust and cooperation as they work together for long
time on this decision. Also, alliances formed between a few of the
managers concerning their interests, but without contradiction
with the interest of the bank. For example, each manager was
seeking a training course abroad due to the moral and financial
benefits for them.” (P10-B)

Power to High P10, P11 and P12 had the same view that the Chairman of the
defend political Board of Directors and his members used their power to impose
Preferences influence
their opinion on the group, due to the strength of their
administrative position in the bank which affects the following
points: (1) Identifying training requirements. (2) Elements targeted
for training. (3) Selection of the optimal offer for training.
Bargaining Low According to P10, P11 and P12, there is the absence of any
among political bargaining between the decision makers in the bank. So in their
Decision influence opinion the political behaviour was very low; due to (1) the
Makers discussion between top managers depends on consultation and open
debate in their official meeting about anything or any problem, (2)
the investment in human resource is the best investment, thus the
decision makers did not care about the cost of training, (3) time and
funds are very important factors facing any company when training
their employees, so the bank made plan to subject the majority of
employees to training without an effect on bank business.
Decision High P10, P11 and P12 stated that this decision is very important to the
Importance importance bank. The bank therefore: (1) spent much time and money to make
this decision, (2) plans to improve employee skills for better
performance of duties, (3) adapting members‘ knowledge to match
5.6.4 Decision circumstances and environmental conditions in and outside the
Importance bank, and (4) develop employees‘ behaviour especially towards
bank‘s customers.
133
".... I think that in order to bank interest, chairman of the board
of directors and the members of board of directors seek to training
of employees....... I believe that there is no hidden information
between them, in order to protect their personal interests behind
the decision". (P11-B)
“...I think that in some cases the President of Board of Directors
and his members impose their opinions by using their power and
the strength of their administration positions for this purpose. For
example, the training courses abroad were limited to certain group
of departmental directors only, by taking advantage of their
personal relationship with the Director-General of the bank or
because of the power of their administrative positions. For
example, a number of staff was selected to travel to India for
training on SWIFT system, but this session was given to another
group of managers despite the fact that the original staff will work
on this system. As a result, no body was found to work on this
system and this negatively affected the work of the bank.” (P11-B)
“…All the papers were put on the table for the discussion by the
members and the managers. Each one gave his opinion with
complete transparency. For example, we made contracts with
specialized institutes at home or in foreign countries to give
training courses. These courses were selected on the basis of their
availability and there was no bargaining about that.” (P10-B)
“Certainly, it was an important decision. For a long time there was
the need for the bank to introduce training courses in all fields.
We have organized, among the training plan for the year 2008,
very interesting training programs, which included: training
courses, seminars, forums in the field of banking business and
assisting programs in English language and computer. The
number of participants in these training courses was 1018
trainees.” (P10-B)
 "..... I believe that due to the importance of training in Bank, the
top managers take enough time to study and analyse all aspects of
the decision, in order to achieve the objective of training........ And
maybe there are other objectives that can be achieved from this
decision." (P11-B)
Subsequent High P10, P11 and P12 listed the subsequent decisions to support past “…To allow the success of this decision, as expected, it should be
Decision importance decisions as: (1) restructuring the bank to match developments in accompanied by other decisions, as for example, the establishment
the banking world, (2) creating new departments (e.g. department of new department and administrative diversification of the
of information technology, department of marketing and provided services.” (P11-B)
department of human resource), and (3) introduction of new "...... For example, after establishing the department of marketing,
services. the Bank issued another decision related to staff positioning and
recruitment in the field of marketing". (P10-B)
Delaying this High Delay Periodic trainings is necessary to meet international standards, P10,
decision P11 and P12 commented. The respondents agreed that there was a
delay in making this decision Some of the reasons for the delay,
according to them are: (1) differences among managers about the
selection process of specialized training institutes, and when to
cancel trainings and courses, due to high costs, (2) the emergence
of some complexities of administrative, and also the lack of good
contact between departments, (3) bureaucratic red tape and lack of
support from the public sector, and (4) delay in the formation of
committees to collect and study data.

Clarity of kind of Medium In his view P10 and P12 there was clarity about information to be “There was no doubt about the kind of information we needed to
Information to uncertainty collected, in issues of: (1) correct assessment of staff requirements, collect. All members knew the type of information and their
be collected
and (2) development of work requirements according to modern individual roles in the process towards making the decision.”
techniques. (P10-B)
5.6.5 High
P11 identified 4 issues where it was not very clear what “ ….. but we also had some issues where it was not very clear what
Uncertainty uncertainty information needs to be collected: (1) development of employee we needed. One key reason for such problem is that there was no
of the culture and the extent of will to develop work ability, (2) consistent clear definition of roles between the concerned personnel. (P11-B)
Decision application of the technical development required for compliance
with external work environment, (3) the political regulations and
laws in force within the country, (4) efficient organization of the
internal hierarchy of the bank.

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 Uncertainties Low P10 and P12 stated that the decision-makers have had full “I must admit that our process had some problems, and this
about the Actions
to be taken
uncertainty knowledge of all the procedures which must be taken to make this affected the quality of our actions……we had regulatory problems,
decision. there was overlap between the functions of mangers, and some
However, p11 stated that there was complication in the application people did not take the training plan seriously.” (P11-B)
high
of procedures such as, (1) many of the regulatory and
uncertainty
administrative constraints imposed by the laws on the state-owned
enterprises, (2) job descriptions (lack) for all departments, resulting
in the overlap of functions between the managers and heads of
departments, (3) shortcomings and negligence by the committees
responsible for the training programs.
Difficulty of Low P10, P11 and P12 emphasised that there was no difficulty in the “…The actions which we have taken were correct and there was
predicting the uncertainty prediction of the outcome of this decision, because (1) the bank cooperation between us in facilitating the procedures. He added,
outcomes
followed scientific methods in terms of identifying the best training we faced some problems and difficulties with the staff because they
requirements and information type collected from consulting firms, did not follow and respect the official hours of the training
(2) the bank permitted top managers to take all necessary courses. He also added that some of them resist the change and
procedures in order for the decision to succeed refuse some training methods.” (P10-B)
Motivation for High According to P10, P11 and P12 there was high motivation to make “…We had several motives behind this decision, for example, to
making the Motivation this decision. This decision was very important to the bank: (1) it create banking workers able to keep up with the development in
Decision
will help solve the crises experienced by the bank, (2) it will the field of banking and able to use the best available techniques.
increase the efficiency of bank staffs, (3) it will enable the bank Also, to meet the current competition this started to appear in the
meet the standards in the international economic arena. This environment of Libyan banking market.” (P10-B)
5.6.6 Decision
Motives
decision, the respondents further commented, would enable the
bank to: (1) introduce new banking services to customers, (2) “I have worked for this bank for many years, and the bank has not
improve the performance of the bank, (3) improve staff skills and been doing well economically for many years. …. I believe that
abilities, enhance the bank‘s chances, and (4) increase the market poor staff quality is one major reason for this. This training
share of the bank. decision will help the bank to economic turnaround.” (P12-B)

135
 Confidence in High P10, P11 and P12 were confident that it was the right choice. This
Making the Motivation confidence, they said, is because: (1) the decision took adequate
Choice
time and was well studied and analysed, (2) training of employees
and their choice was determined by their departments; (3) of the
need to develop administrative structures of bank training; (4) of
the strategy of manpower and human resources through the
development training programs according to business requirements,
and (5) the bank work within the framework of international
standards of training (P4)
Threat to Low While P10 and P12 said there was low level of threat, P11 thinks it
Survival hostility was medium. Explaining their views, both mentioned a number of
threat factors: points, (1) the Libyan banks in general are governed
by clear policies and laws by the Libyan Central Bank , (2) business
requirements that banks should have strategies to improve the skills
of staff, the development of administrative structures of the bank by
training programs, (3) the competition between banks especially
5.6.7 after the new Libyan Bank Laws 1/2005 allow foreign banks to
Environment
al Hostility-
open new branches in Libya, and also processes mergers between
Munificence banks.
Stressfulness High According to P10, P11 and P12, the stress level was high. The
hostility reasons are: (1) as customers demand new banking services, the
bank will have to invest more in human resources, (2) increased
competition will require banks to regularly train their staff to
provide service quality and variety, (3) the new Banking Law
(1/2005) encourages Commercial Banks to putting plans and
programs of the strategy to developing and training staff of bank.
Dominance of the Low P10, P11 and P12 said no single bank dominate yet: (1) there is
Company hostility still limited competition in the Libyan banking industry, (2) the
Banks are still governed by the Central Bank policies, and (3)
almost all the banks are at the same level of development.
136
“…Of course, sure we were very confident of the validity of this
decision because we spent serious effort, time and money. In
addition, there was good cooperation and understanding between
the Director-General and the managers for making this decision.
Also it was a benefit to the employees by improving their skills, in
addition to the financial incentive benefits included in the decision
to encourage them for taking the training courses. In addition, the
bank will improve the banking services to the customers and in
international foreign affairs.” (P10-B)
"...... I believe that confidence in making the right decision was
due to the cooperation with the Arab Monetary Fund and the
International Monetary Fund and other institutions within the
framework of a comprehensive annual training plan and for
taking into account the most important developments in banking
business in all areas". (P11-B)
“…I think the bank started to develop a strong position after
introducing one of the Arabic banks as a partner with a 17%
share; the diversification of its activities and introducing new
products helped to attract more customers.” (P12-B)
“There is some threat concerning foreign banks coming to Libya.
Let‟s wait and see how that will develop further.” (P11-B)
“The stress in the Libyan banking industry is increasing so
much….We need to offer better service, as competition is
increasing.” (P10-B)
“This new Banking Law (1/2005) even makes matters worse.
Foreign banks will come to Libya and push us out of the banking
industry.” (P10-B)
“I don‟t think any bank dominates now, but the possibility that
that will happen in the near future is high.... may be after the
foreign banks will come to Libya.” (P10-B).
 Product of New Low According to P10, P11 and P12 believed that competition was
Services certainly actually low in the industry. With law no.1 of 2005 though, things
will continue to change in the future, and the training decision was
a good step in that connection. Due to, the low levels of
competition, all banks are aware of the banking strategy of the other
banks. Also, all banks are under the new Banking Law issued by
the Central Bank of Libya, and all banks use the reports and
leaflets issued by the Central Bank of Libya. In addition, to some
extent information are personal relationships between the staffs of
the banks. .
Competition Low According to P10, P11 and P12, Competition was actually low in
certainly the industry. With the new law though, things are likely to change
in the future, and the training decision is a good step in that
connection. Due to, that almost all banks are aware of the banking
strategy of the other banks. Also, all banks are under the new
Banking Law issued by the Central Bank of Libya, and all banks
use the reports and leaflets issued by the Central Bank of Libya.
5.6.8 There is to some extent, personal relationships between the staffs of
Environment
al
the banks.
Uncertainty Governmental High P10, P11 and P12 noted that government policies influence the
Policies certainly banking industry. Often the government initiates its policies
through the Central Bank of Libya. The Central Bank issues clear
instructions and policies to the Commercial Banks, as a way of
controlling activities in the industry. One such policy issue that the
Central Bank looks at is training of staffs. This ‗Training Decision‘
can be said to a response to one of the Central Bank‘s policies.
( Researcher observations)
Knowledge about some of the official correspondence by the
Central Bank of Libya, which included some of the instructions and
guidance that must be followed by the bank, through the reading of
some of the documents made available to the researcher whilst she
was interviewing participants.
137
“…We made this decision and provided advanced training courses
for the workers according to the prediction of the new services
which we seek to provide, and according to customer‟s preferences
and services which facilitate the provided service for them as
quickly as required.” (P11-B)
“…The training of staff is considered as the main basis in the
competition process with other banks to get the largest possible
part of the marketing share in local market. Prediction of
competitor‟s policies was known to us, therefore, and for this
reason, it was necessary to introduce the staff to the training
sessions to be able to compete by providing the best banking
services.” (P11-B)
“…For example, we refer to the law no. 1 for the year 2005 which
is considered as a new starting point for the Libyan Commercial
Banks to develop themselves by opening new investment fields.
The law also gave these banks the right to share with other
international banks or to merge with local banks.” (P10-B)
"... We cannot predict government policy, but there is a
relationship between staff training and legal regulations affecting
the business sector. Because, the business sector require banking
services diverse and sophisticated in terms of speed and precision
required in the banking, whether domestic or international. Thus,
this requires us to invest in the human element in order to (1)
maintain the bank's customers, (2) to attract new customers and
(3) ultimately, to achieve the greatest profits.” (P11-B)
 Economy Low As P10, P11 and P12 noted, economic restructuring has been going
certainly on in Libya for some time now. There is restructuring from public
economy to private economy. To ensure that things work better,
there are regular changes in laws to coordinate activities in the
Libyan economy. Currently, the Libyan government, through its
new Banking Law (1/2005), encourages foreign direct investment
and also mergers in Libya.
"..... I believe in the economic reforms taking place in Libya, this
requires the bank to increase investment in human resources to
ensure the provision of new services to business." (P10-B)
“…We, in the bank consider the training decision as a
complementary decision to the economical reforming process
pursued by the state at the present time by investment in human
resources. Therefor this decision was very important.” (P11-B)

Financial and High From the interviews, P10, P11 and P12 were of the opinion that the
Business
Performance
Performance financial and business performance of the bank had looked very “… This decision needed to be financial supported.... the bank
good since over the period of making the ‗Training Decision‘. They had a strong balance sheet that could fulfil all the physical
also said that the bank was able to compare the performance of their obligations with the companies contracted to train staff, (P11-B).
bank with other banks through several financial measurements, “We have done very well since this training plan was introduced.
including the return on assets, operating profits and market share. The bank is financially doing very well.” (P10-B)
5.6.9
Performance
Organizational High P10, P11 and P12 mentioned that organizational effectiveness was “I think that we did not run the risk of operational financial
Effectiveness Performance the new indicator which the bank was able to use to compare with problems, due to the fact that all decision-makers had good
other banks, and this indicator included, for example: the experience of the proper utilization of optimal resources.” (P10-B)
operational efficiency of the bank and staff satisfaction. "During the DM, we focused on the skills and performance of
employees at various administrative levels. We ensured that there
would be rationalization of expenditure and incentives for
workers, and that the opportunities were equal for all workers.
"(P11-B)
Success in High P10, P11 and P12 believe that the objectives of the decision have "I think that although we have attained a certain percentage of
Achieving
Decision
effectivenes been achieved partially. Success was achieved in the area of (1) our goals, we are still suffering from the administrative
Objectives s improving banking services, (2) getting closer to customers, and (3) complexities of the Central Bank of Libya that governs us.” (P10-
improving our profitability. However (P10), more success is needed B)
Medium in the area of (1) enhancing the attitude and behaviour of staffs at
effectivenes work, (2) enabling staff to learn new knowledge in the industry, and “…Significant improvement appeared in employee‟s performance
5.6.10 s (3) improving our structural and administrative processes. through the improved services provided to the customers.” (P12-
Decision
Effectiveness B).

“I Think that the bank is more efficient since the training began.
The bank staffs now know more about service delivery, and they
are also happier doing their jobs. The bank has improved not only
internally, but also in its relationship with customers."(P10-B)

138
 (Researcher observation) “…We can say that we have achieved 80% of all the goals we were
According to the researcher‘s knowledge of Libyan Commercial seeking and we are fully satisfied with this result. He added, but
Banks as a customer in one of the banks, she noted that there was a we still need to encourage the staff in other advanced training
big difference after the services provided to clients were improved, courses.” (P11-B)
especially in terms of respect for the customer, and treating the
customer as a priority, in comparison with the services that were
provided in the past. In addition, the customers on the bank were
very positive, thus the researcher noted that this feedback supported
that the bank had achieved the goals of this decision. This
observation can be generalized to all banks.

Hindsight that High P10, P11 and P12 believe that the right choice was made. The
the right choice
was made
effectivenes timing of the decision was very much appropriate, taking into
s consideration (1) the new Banking Law (1 / 2005), encourages
Commercial Banks to train their staffs, (2) that we needed to
improve our services, (3) foreign banks would enter the Libya
market in the near future, and this will create competition (we need
to prepare for this and train our staffs), (4) the decision was based
on feasibility study and research, and (5) we used external expert
knowledge.
“This decision is a step in the right direction……The bank needed
to learn new ways of doing things, new ways of serving the
customer better, new ways of preparing bank for future
competition.” (P10-B)
“This training decision has been delayed for too long. Due to the
Our old system had too much bureaucracy and administrative
problems. Some training was needed to solve this. Also, the new
Banking Law required a training of this nature.” (P11-B)

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5.6 Data Analysis for Training Decision in bank (C)

Table 5.7: Data Analysis for Training Decision (Bank C)

Themes Variables/Sub- Activity Procedural Rationality: Summary of Analytical Findings Specific Comments from Interviewees
Themes Level:
High/Mediu 13, 14, 15, 16
m/Low

5.7.1 Identification High interviewees (P13, P14, P15and P16) noted six means of identifying "...I think the information they collected was sufficient for DM.
Procedural of rationalit required information: (1) the composition of internal committee to We did not need any additional information. We received
Rationality Information y study the regulatory conditions of the Bank; and determine the assistance by staff in different departments, and from other
Required training needs of staff; (2) the reports of all departments include areas managers in other banks. But the final and critical pieces of
of deficiencies that personnel lack training needs; (3) the cost of information that we relied on while making this decision were
training program; (4) the awareness of banking of the employees to taken from the experience of Arab banks and the consultants we
accept this training; (5) the bank study the offering of companies to depended upon in the identification of training needs; their role
training staff. Moreover, P9 stated (6) also by cooperation between was very important." (P13-Bank C)
banks, the bank also was made the organization of official visits to
Arab banks to know more information.
Decide High According to P13,P14,P15and P16 their bank gathered information "…We held several visits to the Arab Bank of Qatar and the Bank
Methods of rationalit through, (1) evaluation of staff performance and assessing training of Jordan and Egypt before the start of making that resolution.
Information y We sent about 3 committees headed by the department to
Gathering needs, and (2) obtaining information from experienced Arab and
managers of these banks, the duration of the mission took about
foreign banks.
10 days to identify the developed methods of training needs or the
developed styles that we will rely upon in the training of staff
The use of documentation as another method to collect the data of
which area should the employee be subject to training.... We
this study, the researcher was allowed to look at some documents asked officials to provide detailed reports about that.” (P14-C)
regarding the o contracts with specialized offices for staff training.

Obstacles to Low In their responses P13, P14, P15and P16 identified these obstacles of “Of course, we faced some obstacles in gathering information,
Gathering rationalit collecting information: (1) lack of information and inaccuracy spread due to many reasons. For example, as a big bank we had many
Information y in more than one department interlinking areas of specialties, (2) out branches and therefore so many administrative bottlenecks. There
dated administrative regulations of work and lack of flexibility, (3) was also the problem of regulatory control and complexity of
regulatory and administrative constraints imposed by law on the administrative procedures from outside (such as Libyan Central
state-owned enterprises. Bank).” (P16-C)

140
 In addition, P13 and P16 added another two points, (2) there is no
single source for the collection of information and data due to the
large size of the bank and the multiplicity of its branches in various
regions, (2) the lack of specialized human elements in the areas of
information systems.
Analyse High In their responses, P13, P14, P15 and P16 agreed that necessary data
Relevant rationalit related to training needs and bids of companies specialized in giving
Information y training courses had been analysed. In addition, they stated that they
did not have advanced statistical methods to analyse information,
thus, the information was analysed by the expertise of external
consulting companies contracted, both to identify training needs or
study bids and choose the best offer. They also used another method
which was identifying the strengths and weaknesses through the
recommendations of the combined reports of departments.
Crucial High P13, P14, P15 and P16 agreed that the decision-makers were able to
Information rationalit reach the critical information which helped in making this decision.
y In addition they mentioned that the bank considered several points,
which enabled them to make this decision such as, (1) identify the
needs of the departments of the bank, (2) it identification of staff
targeted for this training and the extent of their abilities and
desirability of this training, (3) coordination with specialized training
institute with regard to identifying lecturers and scientific materials.
5.7.2 Personal Low P13, P14, P15 and P16 agreed about the non-use of personal
intuition Judgement intuitiven judgement in the DM, they supported this saying that, (1) training
ess decisions were based entirely on gathering information and facts
necessary to determine the training needs in a scientific way, (2)
studying the financial and human resources, (3) the decision was as a
result of market requirements, in order to improve the banking
services
141
"...As a bank we did not have advanced statistical methods to
analyse data or database information that can be relied upon to
review the data or the elements of human resources specialized in
the statistical analysis this, made the bank use external and
internal in the analysis of information." (P13-C)
“Although we had some administration-based problems that
affected our ability to gather information, I believe we were still
able to collect crucial information to enable progress with the
decision. Honestly, the fact that we used specialised training
institutes helped so much in this point.” (P15-C)
"...due to that the bank is a large organization and we have many
branches scattered across the country, and therefore we cannot
risk making this decision relying on our intuitions" (P14-C)
"...We had some information poverty in spite of all the
information we collected, but the changes and developments in
the external environment of the bank and innovation in training
methods makes it imperative that we have to be always in constant
search and collect the missing information. (P13-C)
“The importance of this training decision to our bank is massive.
Because of that we are investing so much into it as we are very
sure that this step is unavoidable, and it will help the bank
perform very well in the future.” (P16-C)
 Past High In their responses P13, P14, P15 and P16 emphasised that the
Experience Experience previous experience of managers have had a major role in the making
of this decision. As result, (1) the co-educational level and previous
experience in the banking industry for managers and the President of
the Board of Directors has an important role in making of this
resolution, (2) The bank relies on expertise of specialized training
institutes in training programmes, (3) the bank relied on the expertise
of Arab Banks of training, which have been visited.
"...I think most of the participants in that DM had experience in
the field of work for not less than 25 years, along with some high
qualifications. But not all of this long experience in work can be
useful because previous experience of the managers may suffer
from errors or failures....It is therefore inappropriate to apply the
lessons learned in past experiences to the experiences of the
present." (P14-C)
―We have made many mistakes in the past. For example, not
taking the steps to train our staff in the past and bring them up to
modern service levels. …. We cannot afford to make mistakes in
this decision, because it is very important to our future.
Competition is very likely in the future, and it is important that we
should be careful in all our step DM” (P15-C)

5.7.3 Openness with High P14 and P15 noted that the decision makers were focus on: (1) "..One can be sure that there were personal interests between the
Political each other achieving the interest of the bank and developing staff and (2 to
Behaviour about Interests
managers. For example, choosing optimal supply companies
and provide the best services of customers. contracted, it is possible there is a bias in the selection of optimal
Medium P13 and P16 noted that there was some personal interests amongst supply as a result of possible personal relationships between
Preferences
political
influence
some decision-makers, thus certain alliances seemed to exist between managers and such companies or for the benefit of each other,
them on e.g. (1) external training courses, (2) financial bonuses. but such interests are not clear, may have happened in secret so
as not to be know any one and thus alliances may arise between
managers for their mutual interests." (P13-C)
Power to Low P13, P14, P15 and P16 believe that decision makers used power and ".... Authority and power were in the hands of President of the
defend political influence but for the interest of the bank, in terms of (1) choosing the Board of Directors of the Bank only, and we comply with his
Preferences influence best training institute‘s staff training, (2) determining the term of orders only and he organized the process of making that decision,
training, (3) choosing the best employees (based on capacity) the for example, he made selection of the right managers to send
training programs. them on training courses to overseas countries he also decided to
choose optimal supply after consultation with members of the
committee management of the bank and therefore everyone
followed the Director General and comply with his orders ... And
for their interests they had to be on the same side of the Director-
General as he is the highest administrative authority within the
bank. (P13-C)

142
 Bargaining high According to P13, P14, P15 and P16, there was bargaining between
among political decision makers about this decision, in order to resolve some
Decision
influence administrative differences between departmental managers of the
Makers
bank committee. They are (1) reducing the number of staff training
programmes in the bank‘s target training plan; (2) sorting the
differences between the top managers regarding the high cost of
several training programmes; and (3) determining the conditions
which should be available for employees undergoing training.
5.7.4 Decision High In their responses P13, P14, P15 and P16 stressed three points
Decision Importance importan because of the importance this decision which were: (1) the bank
Importance ce spent much time effort and money; (2) the transmission of skills
required for the officer or director to make them able to perform the
duties expect; and (3) directing the employees and the Director and
their adaptation to the circumstances and existing economic
conditions of the external environmental.
Subsequent High P13, P14, P15 and P16 agreed subsequent decisions followed this one
Decision importan in the same importance. This decision is the basis for new services to
ce be provided by the bank in the future, for example a decision
concerning (1) the establishment of a new department and sections,
(2) the introduction of new services (Islamic Murabaha products).
Delaying this Medium According to P13, P14, several reasons caused the delay in making
decision Delay this decision: (1) overloading the bank with many regulatory and
administrative restrictions imposed by the Central Bank of Libya; (2)
complex administrative procedures within the bank; (3) the
complexity of the channels of communication between departments
and divisions within the Bank and between the branches of the bank,
which led to the lack of access to information in a timely manner,
P15 and P16 added (4) differences in training priorities (institute,
cost, and programme) between managers
143
"Often ...... there was bargaining to resolve some of the
differences that occurred, for example, between officials identify
those involved in the financial budget of the process of training
and training department. Where training programs require a lot
of money and in order to reach an agreement appeared in some
cases, such bargains.... occur some differences appeared about
the employees to be subjected in training sessions where every
director wants to give training courses to his staff." (P13-C)
"...it is possible that some members haggled but outside the
formal meetings, for example, to give opinions on the
presentations made by the specialized institutes to give training
courses and which offer is the appropriate and optimal for the
bank ..... And therefore differences emerged between the
administrative committee members to choose the right offer.”
(P14-C)
"... apart from a training plan approved for 2008 the bank
organized training programs in the field of banking and allocated
a budget) as well as the effort by the administration of the bank to
the success of trial sessions, where the number (1200) of trainees
in the various organizational levels participated in these training
courses." (P16-C)
"... Preparation was done immediately after this decision to
introduce units and new sections on banking, for example the
establishment of a new department responsible for marketing the
introduction of new goods and services, a special unit to
information technology." (P14-C)
"…We were already very late making this decision, we were
suffering from problems with the customers, for example,
mistreatment of customers by employees and poor service
provided to them ... In addition we were slower than other banks
in keeping pace with technological developments in the training
of personnel and I think that the delay during making this
decision was due to the complexity of the regulations and laws
governing banks in general, set down by the Libyan government
and Central Bank of Libya ." (P13-C)
5.7.5 Clarity of kind Low P13 and P15 reported that the kind of information required to make “...In my bank, everything was very clear what information type
Uncertainty of Information
of the to be collected
decision was clear such as: (1) correct rating of weaknesses in the we needed. …. I think this clarity of what information we needed
Decision performance of staff; (2) solving problems for customers and the helped the success of this training decision.” (P13-C)
provision of improved services to them, (3) forming committees to
collect information and study them, (4) identification of training
High needs, and (5) marketing environment was clear.
uncertain In contrast P14 and P16 said there was an ambiguity of information
ty required such as: (1) the culture of the employee and the development
of abilities to work, (2) inconsistencies in the tasks and
responsibilities of managers.
Uncertainties Medium P13, P14, P15 and P16 agreed that there were some actions taken “…while making this resolution we were exposed to the
about the uncertain which made this decision not clear, such as (1) there was difficulty in obsolescence of existing laws in the bank, causing us to overlap in
Actions to be ty
taken the procedures of decision, due to the need to obtain administrative responsibilities also some of the managers didn‟t bear the
approval by the Central Bank of Libya for each stage of making this responsibility in some of the measures to be taken and this caused
decision, (2) the vagueness of some of the procedures and laws in some differences between the managers of departments and hence
force within the Bank, and (3) communication between departments the delay in DM.” (P14-C)
was complex (P13).
Difficulty of Low P13, P14, P15 and P16 agreed that there was no difficulty in “…the outcome of this decision can be predicted as long we
predicting the uncertain predicting the outcome of this decision, due to (1) the training worked hard to retain specification of the training needs of staff
outcomes ty programs being related to the functions of staff and their career and also to examine and identify the weaknesses of the programs
knowledge, (2) the reliance on the optimal selection for training and study risk in the decisions in the case of exposure to any
needs of staff, (3) it has been relied on the specialized training obstacle, and the desire of staff to improve their performance.”
centres, (4) the majority of staff having the desire to improve their (P13-C)
functional capacities.
5.7.6 Motivation for High According to P13, P14, P15 and P16 this decision was necessary "…Indeed, the decision, issued by the instructions of the board of
Decision making the Motivation because of the advantages it offers: (1) our banking system was in directors of the bank was about the need to increase the level of
Motives Decision
poor shape, (2) the customers deserved better service, and (3) we employee‟s capacity in a short period, by means of advanced
need to keep up with international banking developments. This training course, hence we felt that the decision was really an
decision was also necessary because the bank needs to (1) increase its opportunity for us to in prove the conditions of the bank from all
ability in the competition that started in the Libyan banking industry, aspects of organizational and service.” (P14-C)
and (3) maintain its market share
Confidence in High P13, P14, P15 and P16 were very confident that this decision was the "...certainly we were confident in making this decision. This
Making the Motivation right choice, because they (1) selected experienced institutes with confidence reflected the development that was evident in the
Choice
good reputation in training programmes, (2) selected scientific banking services and transactions with our banks, also of the
materials in the training programmes for the bank‘s staff, (4) changes in the behaviour, capabilities and good customer caring..
determined the term of training, (5) discussed and consulted between (P14-C)
the Bank Directors Board and its members.
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5.7.7 Threat to Low P13, P14, P15 and P16 suggest that the bank environment was safe “…I think that the environment surrounding the bank is still safe
Environmen Survival hostility and without threats, and they reported that there are three reasons (1)
tal Hostility-
from any threats in spite of some investment doors and allowing
Munificence Libyan banks in general are governed by clear policies and laws some banks to have partnership with the Libyan banks, but the
issued by Libyan Central Bank , and (2) the bank has strategies and situation remains as it is ... it‟s possible that future competition
plans to improve staff skills. One issue they identified as a threat is and investment may increase.” (P14-C)
the fact that the new Libyan Bank Law (1/2005) has opened the door “The fact that foreign banks can now come into the Libyan
to competition by allowing foreign banks to open branches in Libya, banking industry is a threat to Libyan banks. A higher
and also allow mergers between banks. danger is when they start merging.” (P13-C)

Stressfulness High In their (P13, P14, P15 and P16) view, the bank‘s environment is “...in spite of some economic openings and some investment
hostility stressful, due to: (1) increasing demand for new banking services, (2) opportunities, we are still under pressure and at the mercy of
increasing trend of competition between banks (3) the new Banking these laws and policies governing the operations of investment by
Law (1/2005) conditions for banks to have a plan for regular training the Central Bank of Libya.” (P14-C)
of staff.
Dominance of Low P13, P14, P15 and P16 also believe no singe bank dominates yet. The “… the laws of the state allowed us to practice many of the
the Company hostility reasons are: (1) competition is still low, (2) the bank cannot control investments, we can have the ability to control and compete in
the behaviour of customers, (3) the bank is governed by policies of the market, now we could not until we free ourselves from such
the Central Bank of Libya, and (4) the level of skills and efficiency laws imposed on us by the Central Bank of Libya, which govern
of workers is very similar at all banks. the activities of investment”. (P13-C)
5.7.8 Product of Low P13, P14, P15 and P16 emphasised the possibility of predicting the “…We worked hard to place staff in training sessions in order to
New Services certainly new service provided in the bank. In this connection, they said: (1) improve the services provided to customers, and thus we can
Environmen
the clients are looking for speed and accuracy in the performance of predict what they want from new services and improve their
tal banking services, (2) to meet that requirement we had to improve our behaviour as the employee was treating the customer badly” (P13-
services, and (3) to ensure that we needed to conduct training to C)
Uncertainty improve the employees‘ skills.
Competition Low P13, P14, P15 and P16 suggest that competitors can be predictable in “…in order to compete with other banks and get the appropriate
certainly the Libyan banking market because (1) lack of competition; (2) market share in the market we must have staffs well trained on
similarity in bank policies, and (3) result of reports and leaflets all the marketing and banking methods in accordance with
distributed by the Central Bank of Libya are known by all banks. updated existing technologies.” (P13-C)
“There is low level of competition at moment, but how that will be
in the near future, we don‟t know yet. ….let us wait and see.”
(P14-C)
Government High P13, P14, P15 and P16 stated that so far the monetary policy can be “…Despite the existence of laws governing the State-owned
al Policies certainly predictable. However, legal regulations affecting the business sector banks in general and especially now when a new start to open the
may not be predictable, as the government often comes up with new prospects of investment for Libyan banks in general, but still the
laws, for example, the new Banking Law (1/2005). laws of the Libyan government are highly unpredictable " (P14-
C)
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 Economy Low P13, P14, P15 and P16 note that, so far, the economic policies can be "...a short period of training for the staff is the first foundation
certainly predicted, especially because of the impact of the Islamic Murabaha for the reform of the Bank and the development of our banking
(P9). Overall, economic policies were predictable, as they were services. That decision was issued in accordance with economic
largely expected steps to ensure that the banking system is updated in reforms in the state.” (P15-C).
line with global developments. However (P10), the Libyan economy
is in transition from public to private sector. Because of this, some
unpredictability about the economic policies looks likely in the
future.
5.7.9 Financial and High According to P13, P14, P15 and P16, financial performance was one “.... The market share of the bank was to increase during the
Performanc Business Performan of the most important indicators in comparing their bank with other
e Performance
making of this decision, because the bank started the application
ce
banks of the same size and business. In their view, the capital of the of new trends.... but we faced some obstacles." (P16-C)
bank was excellent during the making of this decision. And the
indicators that were compared were (1) the rate of return on assets,
(2) market share of the bank.

(Documentation and observation) : The bank allowed the researcher

to view the balance sheets; thus, it is clear to the researcher that the
financial situation of the Bank was strong and they had the resources
to cover all expenses and costs involved in the DMP. In addition, the
researcher notes that the bank personnel did not complain of a lack of
financial resources.

Organizational High P13, P14, P15 and P16 believed that organizational effectiveness was "There are current trends of the importance of attention to the
Effectiveness Performan an important organizational performance indicator which allowed human element because of its deep influence on organizational
ce
them to compare their bank with other banks; the indicators were, for effectiveness of orders within the Bank, and the satisfaction of
example: the operational efficiency of the bank and staff satisfaction. employees is one of the main goals of the bank, in addition to the
. customer's satisfaction with the services provided to them.” (P13-
C)
" ...... I think that ... the bank was providing appropriate facilities for the
staff, and that the circle of contact personnel was widened, and we were
working to meet their financial and moral needs, attaining the
satisfaction of workers and thus having an impact on banking
services."(P14-C)
5.7.10 Success in High From the responses of P9 and P10, the achieved the objectives of "...... I am sure that we made the right decision. The goal was to
Decision Achieving
Effectivenes Decision
effectiven this decision, both in terms of better service and profitability target: improve the way things are done in this bank, and also to improve
s Objectives ess (1) after launching the decision, the implementation of the training our performance, both to the bank itself and to the customers and
was, and has continued to be successful, (2) they have improved in public. We have done very well concerning these issues.” (P13-C)
the nature of service and the manner of delivery, (3) trained staffs are
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 showing the advantage of the new skills learned, and (4) the
profitability level is increasing.
Hindsight that High P13, P14, P15 and P16 believed that the right choice was made. This "………. Due to the circumstances and variables on the current
the right choice
was made
effectiven decision, they said, is one that will be very helpful for the bank in the international economic arena, and the growing interest in the
ess future, as new developments take place in the industry. Also, the program of training to achieve the objectives of the Bank, this
decision was important, as the bank needs to improve its service decision was more than necessary. The decision was right." (P14-
offering to the customers. According to them too, a training plan had C)
to be initiated as the government policy demanded this. The bank‘s “…this decision was very right, because government policies
staffs needed to be trained for future demands (e.g., competition in required us to do that. Also, the customers are beginning to know
the future), when foreign banks enter the Libyan banking industry. their service rights more, and this training was necessary, so that
our staff can know how to keep customers happy and at a profit.”
( Researcher observation ) (P13-C)
An improvement in service inside the bank was obvious through the
researcher's observation within Bank c, and the access she was given
to view the public budgets of the Bank.

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5.7 Summary of Key Findings for Each Strategic Decision (SD)

Table 5.8 presents a summary of the empirical findings for each SD, based on the 10
themes of this study. In discussing the analytical results, respondents‘ quotations are
used to support conclusions. To avoid repetition, where there is similarity in findings for
a theme (and or sub-theme) for the Banks, a reference is made to the relevant section,
where the point has been previously discussed.

Table 5.8 : Summary of Key Findings for each Strategic Decision (SD)
Themes SD new technology in SD The Islamic
bank (A) Murabaha in bank (A&B)
Procedural There was a process for There was a high focus on
Rationality gathering and analysing useful gathering and analysing
information. They also had information for the SD. There
some obstacles in the process. was large use of external
sources in the information
processing.
Intuition This SD making based more Here, while past experience
past experience and very low was strongly emphasised,
personal judgement personal judgement based on
logic was also used. Three
levels of personal judgement
(high, medium and low) were
found.
Political The decision process did not There was some degree of
Behaviour reflect political behaviour. display of personal interests &
Openness about interests and preferences, use of power and
fair bargaining for the interest influence and politically based
of the bank were shown. No bargaining between decision
use of power or influence. makers.
SD Training in bank (B&C)
There were clear efforts to gather
and analyse required information.
The process involved the use of
both internal and external (e.g.,
consultancy bureau and visiting
Arab and other countries with
experience in the area.
For this SD, emphasis was on past
experience, but personal
judgement (medium level) was
also used.
Evidence similar to the national
payment SD, on the elements of
interests and preferences and
bargaining. Some measure of use
of power and influence existed,
especially in Bank B

Decision The decision was seen as very
Importance important to the future of the
Banks
Uncertainty No uncertainties concerning the
of the Dec. kind of information to be
collected. They were sure of
the actions that needed to be
taken, and they could
reasonably predict the outcome
of the decision
Decision There was a clear motive, and
Motive the managers were quite sure
they were making the right
choice.
Environm. There were no major threats to
Hostility- the survival of explored Banks.
Munificenc There were investments in
e facilities and structures
Environm. The SDMP reflected a stable
Uncertainty environmental climate. There
was reasonable stability in the
economic (customers‘ demand
and competitor factor), as well
as governmental policies).
This decision was also seen as
very important for company
growth and serving customers
well
There were uncertainties about
the information needed and the
actions to be taken concerning
the decision. However, they
were able, to some extent, to
predict the outcome of the
decision.
There was a highly clear
motive, and the managers were
certain that they were making
the right choice.
There were no threats too in
this SD. There was human and
financial capacity
The evidence for the ‗Islamic
Murabaha SD was very similar
to the ‗new technology‘ SD.
This was seen as a very important
decision to raise standard and
performance
There were uncertainties about the
information needed and the
actions to be taken concerning the
decision. However, they were
able, to some extent, to predict the
outcome of the decision. There
was high uncertainty about
actions to be taken.
There were clear decision motives
and the decision makers were
quite sure that the right was made.
No major threats were found in
this SD
Evidence similar to that of the
‗new technology‘ and Islamic
Murabaha SDs. However, there
was evidence of governmental
policies instability

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Performanc Bank had the necessary
e financial resources, which it
used to support the DMP
Decision Decision effectiveness was
Effectivenes achieved. The goals for the
s ‗Training‘ SD were being met.
The bank had a strong financial
performance, and was efficient
in using its financial resources
in making this decision.
Decision effectiveness was
achieved. Better services are
being delivered. The customers
are satisfied.
Given a strong of financial
situation to the bank and
availability of resources, the Bank
follows a new approach,
Organizational Effectiveness
which is the satisfaction of
workers.
This SD was also effective.
Through this SD they learnt new
ways of doing work.

5.8 Summary

The answers that represent the findings of this study were obtained through the
interview schedule [see Appendix 2], which was developed from the research questions
and the literature. This chapter has discussed the ten factors which were identified in the
previous studies, and which affected the process of strategic decision making within
the three banks in Libya. Each decision has been analysed separately as presented in the
Tables 5.3-5.7. The researcher used three criteria (high, medium, low) to judge the data
which were collected from interviews, documents, and observations, in order to
determine the extent and impact of these factors on the DMP.

It was found that these factors differed in their effect on the process of strategic decision
making and some of them had a strong affect for example Procedural Rationality,
Decision Importance Decision Motive, and Environment. Hostility-Munificence,
Performance; however, some others had little effect on the process for example political
Behaviour, intuition. In addition there were similarities in the findings for each of the
five strategic decisions based on the evidence for all the examined themes, but there were
also differences. The results presented in this chapter in Tables 5.3 to 5.7 are discussed in
Chapter 6, and compared with other empirical results reported in the literature.

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 CHAPTER SIX: FINDINGS AND DISCUSSION

6.1 Introduction

The theoretical context for this study is strategic decision making process (SDMP),
Commercial Banks in Libya. The study questions are:

1. What are the key factors influencing the process of strategic decision
making in the Libyan commercial banks?
2. What is the relative importance of „rationality`, „intuition`, „political
behaviour` in the process of strategic decision-making?
3. What is the influence of managerial factors on the process?
4. What is the influence of perceived “decision importance” on the process?
5. What are the key factors influencing strategic decision effectiveness?

The chapter is presented in two parts. Part one (Section 6.2) presents the results from
data collection methods. Part two (Section 6.3) discusses the findings compared with
other studies in the domain of SDMPs.

6.2: Discussion of Analysis

The analysis of five decisions in three banks suggested the situation summarised in
Figure (6.1). The findings are discussed in the following order: Procedural Rationality,
Intuition, Political Behaviour, Decision Importance, Uncertainty of the Decision,
Decision Motive, environmental hostility-munificence, environmental uncertainty,
performance, and decision effectiveness, for each of these themes, results are presented
to include:

1. The evidence for each Bank concerning the SD explored,

2. The areas of similarities or differences between the Banks, and
3. The associations between the various themes, where such a conclusion can be
empirically justified.

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 Figure 6.1: Summary of findings for all five Decisions

 Five Decisions in 3 Banks

 One Environment
 One Business Sector
 Stable Munificent Context
 Very Important Unique Decisions
 Policy Directive Given
 Low Uncertainties
 Available Resources
 inexperienced Senior Groups

A comprehensive rational approach to process of Decision-Making with political

influence or intuitive judgment

Decision Effectivenes

6.2.1 The Influence of Managerial Factors on SDMP

In this section, the researcher discusses the empirical findings for each element
separately in accordance with the five decisions in the three banks. These factors are
recognised in most of the SDM literature (see chapter three). The researcher tried to
reach the results by discussing the practical results of each factor of DM, and finding
similarities and differences between the decisions in the three banks, according to the
standards that the study used to measure the results of each decision. This was done to
show the extent of the impact of each factor on the SDMP in the Libyan Commercial
Banks; the results were further validated by referring to the comments of participants
that were presented in Chapter 5.

Procedural Rationality

Procedural rationality was a key factor in the SDMP of all the Banks (see the
Interviewees‘ comments in table 5.3 (section 5.2.1), table 5.4 (section 5.3.1), table 5.5
(section 5.4.1), table 5.6 (section 5.5.1) and table 5.7 (section 5.6.1), section Procedural
rationality).

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The Banks collect and analyse information, the interviewees reported: (P3-Bank A),
(P7-Bank A), (P11-Bank A), (P13-Bank A). In the process of collecting and analysing
information, they gave much attention to experience. The banks‘ staff were sent to
observe banking in other countries for them to learn from experienced professionals,
while committees were formed in the case of ‗Islamic Murabaha SD‘ in Bank B. The
Banks used executive experience as part of their rational procedures .Their collecting
and analysing of information involved reasonable efforts to solve the difficulties they
had that may affect the success of the SDs. (P3-Bank A), (P9-Bank A), (P16-Bank A) .

It is worth mentioning, that the findings shows some similarities with all banks in that
there was a common collective cooperation between executive and staff to obtain the
information by virtue of friendship and personal relationships, between them. This may
be due to the impact of organizational culture in the banks, or customs and traditions of
individuals among them which impacted on the internal work environment of the bank:
[see comments from interviews in appendix (6)].

When there was a need to analyse the collected data for DM, all banks indicated that
they lacked qualified staff, advanced technology and a standard information database
(see Table 5.3, 5.5, 5.8 and 5.9). All banks identified a need to improve the statistical
knowledge among staff as an important factor for future measurement of performance
(P6-Bank A in section 5.3.1). In the case of the ‗new technology SD' in Bank A and
‗Training SD‘ in Bank C, the banks relied on the external resources for analysing the
information.

For the ‗new technology SD' in Bank A, the process of gathering information depended
more an internal sources, while the ‗Islamic Murabaha SD‘ in Bank B and ‗Training
SD‘ in bank C combined internal and external, though with differences: (P1-Bank A),
(P7-Bank A), (P13-Bank A),(P11-Bank A).. For example, as evidence in section 5.2.1
shows, for the ‗new technology SD‘ in Bank A, some external sources were used, the
decisions made were largely influenced by the evidence obtained through internal
committees composed of the executive director of the project and group members, as
well as reports collected from various departments. On the other hand, for the ‗Training
SD‘ in Bank C (see section 5.4.1) both internal (internal committee to study the
regulatory conditions of the Bank and determine the training needs of staff, as well as
the departmental reports concerning training needs) and external (cooperation with other

152
banks, and official visits to Arab banks to understand more information) sources were
considered in the DMP.

For in the ‗new technology SD‘ in Bank A, the interviewees believed that the
effectiveness of the decision was illustrated through achieved goals and improved
performance (success in Achieving Decision Objectives), as seen comments in Table
5.3 (section 5.2.10). The interviewees‘ comments for Bank A in ‗the Islamic Murabaha
SD‘ also supported this conclusion: (P4-Bank A).

For ‗Islamic Murabaha SD‘ in Bank B, there was also evidence that procedural
rationality contributed to effectiveness of decision through performance: (P8-Bank A),
(P7-Bank A), (P9-Bank A).

Intuitive Behaviour

The results are presented in table 5.3 (section 5.2.2), table 5.4 (section 5.3.2), table 5.5
(section 5.4.2), table 5.6 (section 5.5.2) and table 5.7 (section 5.6.2). The evidence from
the present study found that the banks did not use intuition in their strategic decision -
making processes. Since the SDs were seen as very important, the executives were very
careful to avoid serious mistakes (e.g. ‗The new technology SD‘ in Bank A: (P1-Bank
A), (P3-Bank A) in order to ensure that no negative impact is made on the Bank‘s
performance.

Given the process of making decisions required for carefulness and avoidance of risks,
banks based their decisions on past experience rather than on personal judgement: (P2-
Bank A), (P6-Bank A), (P11-Bank A). In addition, they looked at what other banks
have done in the area of Islamic Murabaha: P6-BankA) and what level of experience
auditors have in Islamic Sharia: (P7-BankB).

Also, as the evidence for the ‗Islamic Murabaha SD‘ (Bank A) shows, Intuition based
sense-making might be effective in deciding or exploiting the opportunities for
investment which exist in the market of Libyan banking, and also departmental re-
structuring decisions: (P4-Bank A).

In case of ‗Training SD‘, past experience is seen highly important in making ‗Training‘
decisions (see Table 5.5. and 5.7.). Both Banks B and C used the expertise of
specialised training institutes and other banks on which to base training decision.
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Political Behaviour

The results from this study (see table 5.3 (section 5.2.3), table 5.4 (section 5.3.3), table
5.5 (section 5.4.3), table 5.6 (section 5.5.3) and table 5.7 (section 5.6.3), provide some
insight into political behaviour in SDMPs in the banks. The three key ways that political
behaviour may be displayed in a SDMP include:

1. Lack of transparency amongst decision makers concerning their interests and

preferences,
2. Use of power to defend their preferences, and
3. Bargaining amongst decision makers.

For each of the sub-themes, there were some similarities, but also differences, between
the Banks.

Overall, none of the Banks reflected strong political behaviour in their SDMPs. There
were minor differences in the use of power, but in most cases, some form of general
agreement was reached. Even in such circumstances where there were differences;
agreed organizational goals seemed to be the main focus. For example, the ‗new
technology SD‘ in the Bank A: (P1-Bank A), (P2-Bank A). Another example, in the
‗new technology SD‘, was that they cooperated, shared information and bargained
positively in the interest of the Bank.

This may be due to the organizational culture of the bank, so that employees know what
is right for their organization, and this has a clear impact on organizational outcome
processes (P1-Bank A).

For the ‗Islamic Murabaha SD‘ of Bank A, the findings concerning political behaviour
in the SDMP were not different for the evidence to the ‗new technology SD‘. Again,
there were minor differences and use of power from top level, but organizational
interest was the main priority: (P6-Bank A).

There was constructive consultation, which may explain the impact of organizational
culture on the staff in the surrounding work environment of the bank: (P5-Bank A) and
transparency among the decision makers in the SDMP for Bank A: (P4-Bank A).

154
There were occasions when the Chairman of the Board used his powers in the
‗Islamic Murabaha SDs‘ Bank A, especially when selecting the best contract offer
from business partners: (P5-Bank A).

The findings for the ‗Islamic Murabaha SD‘ Bank B also showed the important role that
the Chairman of the Board played in the DMP. As for ‗Islamic Murabaha SD‘ Bank A,
while the chairman played a big role in the decisions, the decisions were discussed with
other members. Also, opinions and preferences amongst decision members differed
sometimes, but these were not driven by self-interest, but rather were efforts aimed to
ensure that the ‗best‘ decisions were made. Bargaining, for the interest of the Bank, was
also a feature of the DMP: (P7-Bank A), (P9-Bank A).

Minor degrees of political behaviour were displayed in the Islamic Murabaha SDMP.
On the one hand, the core involvement of the Central Bank created room for some
political influence in the decision process. Also, as shown in section 6.4.3, the use of
committees, authorities and legal provisions had a dominant influence on decision
processes.

The findings for Bank B for the ‗Training SD‘ seemed to reflect transparency in the
DMP. There was also convergence of views and an atmosphere of trust and cooperation
amongst the decision makers: (P11-Bank A), (P12-Bank A).

For Bank C, which, like Bank B, is a case study for the ‗Training‘ SD, the interviewees
pointed out the possibility of interest and preferences on the part of the decision makers.
However, their interests were not very clear and may have happened in secret, which
may have led to secretly agreed alliances between concerned personnel during the
DMP: (P13-Bank C).

The evidence of secretly agreed alliances in ‗Training SD‘ Bank C is also supported by
the evidence of the ‗Training‘ SD in Bank B. As evident in the comment (P11-Bank B),
one way of arranging agreed alliances is by some personnel taking advantage of their
personal relationships with the Director General of the Bank, who has high political
influence. Interestingly, this evidence of the power of the Director General in ‗Training
SD‘ Bank C pinpointed above, also seems to be the case for the ‗Training‘ SD in Bank
C: (P13-Bank C).

155
Since other managers might have opinions different from that of the President of the
Board, they tend to use secret lobbying to get their views recognised. For example, to
obtain the budget to cover the financial training courses at the same time as serving their
personal interests and the staff close to them. Bargaining is also common in such
circumstances: as stated by interviewees: (P13-Bank C) and (P14-Bank C). The
possibility of political behaviour in the SDMP seemed higher in Banks B and C.

Decision Importance

Decision importance is presented in table 5.3 (section 5.2.4), table 5.4 (section 5.3.4),
table 5.5 (section 5.4.4), table 6.6 (section 5.5.4) and table 5.7 (section 5.6.4). The
strategic decisions included in the study were all considered as very important decisions
for their Banks: (P3-Bank A) and (P1-Bank A). The SDs were seen as critical to the
organizational outcome and future performance of the Banks.

‗New Technology SDs‘ in Bank A, it was noted that the decision to invest in new
technology has achieved a higher level of integration and connection between different
organizational activities, and in linking the bank with other banks, and also in
expanding international activities (P2-Bank A and P3-Bank A). New training courses
for staff, and a new department was created to implement this decision.

For the ‗Islamic Murabaha SD‘ in Bank A and Bank B, the importance of this decision
was confirmed by the interviewees: (P9-Bank A). The major reason to make this
decision related to achieving the wishes of Islamic Law of a particular community
which wanted a different banking activity to usury. There was also opportunity to
expand banking activities inside and outside the country.

Similar evidence for the importance of the decision was found for Bank B in the
‗Islamic Murabaha SD‘: (P8-Bank B). This evidence supports the suggestion that the
importance of the decision had a contributing effect on SD organizational outcome:
(section SD effectiveness).

For the ‗Training SD‘, both Banks B and C made decisions to improve employee‘s
skills for better performance of duties and to ensure that the employee‘s knowledge was
adapted to the economic and environmental circumstances inside and outside the bank
(see Table 5.8 and 5.9).

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The evidence for the ‗Training SD‘ Bank B (section 5.5.4) also shows similarities with
decision importance and committed effort towards SD success that were reported in the
findings for ‗new technology SDs‘ and ‗Islamic Murabaha SDs‘ (Banks A and B).
There is reason to suggest that decision importance has a direct influence on procedural
rationality, leading to SD effectiveness: (P11-Bank B). The interviews with the Banks
also pointed to the issues that the Banks faced which caused delays in the DMP for the
SDs. They were concerned with operational issues in the SDMPs of the Banks: [see
comments from interviews in appendix (7)].

In answering the question about the reasons for delay in making the decision, the
interviewees pointed out several reasons: overloading the bank with many regulatory
and administrative restrictions imposed by the Central Bank of Libya, complex
administrative procedures and the complexity of the channels of communication (P13-
Bank C), (P15-Bank C).

An interviewee of the Bank (P14-Bank C) pointed out other operational issues in the
Bank‘s SDMP for the ‗Training SD‘, as well as the issue of differences in the views and
opinion of managers in the DMP, (a point that was mentioned earlier under political
behaviour). As can be seen below too, this difference in opinion was also stated in the
comments of the ‗Islamic Murabaha SD‘ Bank B and the ‗Training SD‘ Bank C: (P8-
Bank B), (P14-Bank C).

Uncertainty of the Decision

From the interview results, as evident in table 5.3 (section 5.2.5), table 5.4 (section
5.3.5), table 5.5 (section 5.4.5), table 5.6 (section 5.5.5) and table 5.7 (section 5.6.5),
there was reasonable certainty concerning the SDs. In the Libyan Commercial Banks,
reasonable steps were taken, and a dedicated effort was made to ensure that ‗new
technology SD‘ Bank A was successful: (P1-Bank A), (P2-Bank A).

This dedicated effort included clearly identifying the information needed, as shown by
the comments: (P2-Bank A). There were little or no uncertainties concerning the kind of
information to be collected. Also, they were certain about the actions that were needed
to ensure the success of the decision. They could, with some degree of certainty, predict
the outcome of the decision: (P1-Bank A).

157
The ‗Islamic Murabaha SD‘ in both Banks A and B are similar. There were great
uncertainties about the contract-related information and details about the regulatory and
administrative constraints imposed by the Law (see section 5.3.5 and 5.4.6). For Bank
B, ‗Islamic Murabaha SD‘, reported that this was where the information need was
unclear. To solve this problem, those decision-makers found quick solutions by
observing how Arab Banks overcome the lack of clarity of the information: (P7-Bank
B). Despite the differences and disagreements (as stated by P7-Bank B‘s comments),
the Bank was not only able to predict the outcome, but also suggest that the SD helped
the Bank improve in several performance dimensions (P8-Bank B‘s comment).

For the ‗Training SD‘, Banks B and C were used as case studies. For Bank B, in the
section 5.4.5, it was reported that the information required, which was used in the DM,
was clear. In addition, they had knowledge about the actions that should be taken (P10-
Bank B). However, there was another point of view from another participant, who
stated that there were some issues that were not clear to decision makers, which needed
to be studied, in particular in terms of the nature of the problems that had influenced the
quality of their actions, (P11-Bank B). However, participants agreed that there were no
difficulty to predict the outcome of the decision, indicating the absence of ambiguity in
DM (P10-Bank B).

For the ‗Training SD‘ Bank C, the findings showed that the kind of information the
Bank needed was very clear. According to (P13-Bank C), this clarity of information
helped the decision-makers to achieve the goals for which the DM aimed and
contributed to the success of the SD.

Further findings for the ‗Training SD‘ Bank C indicated problems of overlap in
responsibilities and differences between managers, leading to delays in DM: (P14-Bank
C). The comments by (P13-Bank C) pointed out that the outcome of the decision could
be predicted and that efforts were made to ensure the success of the SD.

Decision Motive

The analytical results (see Table 5.3 (section 5.2.6), table 5.5 (section 5.3.6), table 5.7
(section 5.4.6), table 5.8 (section 5.5.6) and table 5.9 (section 5.6.6). indicate a clear
decision motive was evident for all Banks, and this led decision-makers to follow a
rational approach in their SDs.
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For Bank A, there was a high motivation for the decision ‗new technology SD‘, as the
managers felt there was a great need for it, and an opportunity to make good use of new
technology: (P3-Bank A), (P1-Bank A). There was a need to follow current
developments in the global industry and offer the customers better service, to enhance
the profitability of the organization. Bank A was committed to achieve the effect of this
‗new technology SD‘ because this was an opportunity not to be missed. As P1 (Bank A)
noted, the decision makers were sure and confident that the decision was the right
choice. Because they were investing in a technology that would enable the bank to
provide better service to their existing customers and also open channels for better
global banking operations. Thus, proper steps were taken: (P2-Bank A), (P2-Bank A).

Bank A findings for the ‗Islamic Murabaha SD‘ showed similarities with the ‗new
technology SD‘. There was a clear motive for this decision: (P4-Bank A) and (P5-Bank
A). They show that this bank invested time and money into the SD. There was a clear
motive for the decision and confidence in making the choice. In addition, the core
motives of the decision for Bank A for the ‗Islamic Murabaha‘ SD (table 5.4) included
improving its service package to its customers, increasing the bank‘s market share,
addressing risks and increasing profitability.

For the ‗Islamic Murabaha SD‘, Bank B‘s evidence (table 5.5) indicates the core
motives included using the ‗Islamic Murabaha SD‘ to expand its services, enhance the
efficiency of financial intermediation, encourage investments and development projects,
and as a tool to help solve the problem of the refusal to deal with interest because it is
contrary to Islamic Sharia: (P7- Bank B) and (P9-Bank B).

The evidence for the ‗Training SD‘, Bank B and Bank C indicates a clear SD motive,
which included having a working Banking system with trained personnel able to cope
with developments in the banking field. There was also the motive of preparing the
Bank for the competition that is beginning to increase in the Libyan Banking Industry,
and for economic change: (P10-Bank B) and (P12-Bank B).

For the ‗Training SD‘ Bank C, the motives were to meet the requirement issued by the
board of directors of the bank, and improve the Bank‘s organizational and service
aspects: (P14-Bank C). Both Banks B and C were confident that the ‗Training SD‘ was
the ‗right‘ decision, and would succeed: (P10-Bank B), (P11-Bank B), (P14-Bank C).

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Overall, banks were highly motivated in making their decisions, and investing their time
and money. They invested in ‗new Technology‘ to improve their performance,
administrative system, and to keep up with the advancements in the global banking
industry. Introducing and innovative banking system, like Islamic Murabaha, enabled
them to improve their service package to customers, expand their banking activities and
to increase their profitability. The need to make a decision for ‗training‘ to increase their
employee‘s skills for accepting new technology and new banking services was critical
to their success.

Environmental Hostility-Munificence

Table 6.3 (section 5.2.7), table 5.4 (section 5.3.7), table 5.5 (section 5.4.7), table 5.6
(section 5.5.7) and table 5.7 (section 5.6.7) summarise the analytical findings for the
Banks. The influence of environmental hostility-munificence is observed to be low in
the DMP.

The evidence for the ‗new technology SD‘ Bank A refers to a highly munificent
environment in the industry: comments by P3-Bank A suggest that the environment was
safe after adopting the new strategy and the Bank achieved stability and growth. P2-
Bank A suggests there were no major threats, and there was enough investment in
personnel and infrastructure. However, as P2-Bank A also notes, involvement of the
Libyan Central Bank may hinder the chance to use the additional capacity: (P3-Bank
A), (P2-Bank A), (P2-Bank A).

For ‗Islamic Murabaha‘ SD Bank A and B, (P3-Bank A), there was evidence of
availability of financial and human capacity. However, although the interviewees
indicated that the Central Bank of Libya‘s policies and regulations might limit the
operating chances of the Bank, it is maintained in a subsequent comment that there were
no threats to the survival of the bank: (P6-Bank A) and (P4-Bank A).

The safe environment of the Libyan Commercial Banks in relation to the ‗Islamic
Murabaha‘ SD was also reported by Bank B. Similar to Bank A, there was also an
indication of no threat to the survival of the Bank, further comments suggested the
guidelines defined by the Libyan Central Bank were too strict and caused the Bank
some stress. Thus, there were no threats that could hinder their ability to use their

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capacity. There was indication of further threats (competition) in the future in the
Libyan banking industry: (P7-Bank B) and (P8-Bank B).

For the ‗Training SD‘, Bank B‘s evidence found growth in the Bank‘s activities due to
the effectiveness of the SD. P11-Bank B pointed to threats related to foreign Banks
entering the Libyan Commercial Bank industry: section 5.5.7 (P12-Bank B), (P11-Bank
B) and (P10-Bank B).

For the ‗Training SD‘ Bank C, the results showed similarities with the findings for Bank
B for the ‗Training SD‘, and for the ‗new technology SD‘ concerning the safeness of the
environment, and the threat from foreign banks: (P14-Bank C), (P13-Bank C).

Overall, the impact of environmental hostility on DM is noted as low for threat to

survival and dominance of the company, while, for stressfulness it is considered high.
All banks reported they have faced severe pressure especially when introducing new
technology and implementing Islamic Murabaha. The reason is clear as they need to
restructure their banking services to accept these changes in accordance with the
regulations. The lack of their employee‘s knowledge about the new technology and
Islamic Murabaha adds more stress to their environment. However, they were confident
as they already have plans to improve staff skills and knowledge.

Environmental Uncertainty

Analytical findings from this study (see table 5.3 (section 5.2.8), table 5.4 (section
5.3.8), table 5.5 (section 5.4.8), table 5.6 (section 5.5.8) and table 5.7 (section 5.6.8),
indicate that the Commercial Banks did not face harsh environmental conditions. To a
large extent, they could predict the service preferences of their customers, and there was
not much competition. Even government policies were largely predictable.

For the ‗new technology‘ SD, the evidence for Bank A is pinpointed in section 5.2.9.
P1 and P2 of Bank A indicate that they could reasonably predict government policies
(concerning monetary policies issued by the Central Bank of Libya) and the economic
conditions surrounding their bank‘s activities: (see comments on section governmental
policies (P1-Bank A) and sub section Economy (P2-Bank A)).

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For ‗Islamic Murabaha SD‘ Bank A, there is evidence to show that the role of the
Central Bank to regulate and coordinate the industry might have been affecting the
opportunity for competition in the market: (P4-Bank B), (P5-Bank A).

Further evidence was also found that Bank A was able to predict the acceptance and
the success of the new service ‗Islamic Murabaha SD‘, and the preference of the
customers because of the social service element of the service: it will help solve a lot of
problems for them (e.g. citizens refusing to deal with usury and preferring to deal in
accordance with Islamic Law: (P4-Bank A).

Bank B comments for the ‗Islamic Murabaha‘ SD indicate a lack of competition in the
market. Also, this comment supports earlier comments for ‗Islamic Murabaha‘ SD Bank
A: (P5-Bank B) and (P4-Bank A) about the government‘s role concerning policies and
how this affects the level of competition in the market: Both (P7-Bank B) and (P4-Bank
A) noted that ‗Islamic Murabaha‘ SD was a great investment opportunity for the Libyan
Banking industry.

On the competition point, the ‗Islamic Murabaha SD‘ Bank B found competition was
actually predictable in the banking industry, and there was an increasing possibility that
competition would encourage Commercial Banks to make new investments, thus all the
Commercial Banks were developing new strategies: (P7-Bank B).

For the ‗Training SD‘ Bank B and Bank C, the findings show that the training courses
were designed to enable workers to deliver services more suited to customers‘
preferences: (P11-Bank B), (P13-Bank C).

It seemed that competition was also predictable, as comments by P10-Bank C indicate,

He points out that there was low competition, and the need for a ‗wait and see‘ approach
for the future. The combined comments from Bank B and Bank C suggest that the
‗Training‘ SD was aimed to prepare the Banks for possible competition. This approach,
they indicate, was necessary for their Banks to retain their market share: (P11-Bank B),
(P13-Bank C).

More comments for Banks B and C give further insights in to the unpredictable features
of their environment, and also the proactive steps taken. According to the ‗Training‘ SD
Banks B and C, one environmental condition concerning the ‗Training‘ SD, was that

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government policies and regulations could not be predicted. Because of the
unpredictable nature of this condition, further proactive actions were taken towards, for
example, maintaining the Bank‘s customers, attracting new customers, etc.: (P10-Bank
B), (P12-Bank B) and (P14-Bank C).

Economic reform was also seen as an environmental feature that influenced the SDMP
in the Libyan Commercial Bank Industry, especially for the ‗Training‘ SD. Such
reforms require a proactive response from Banks: (P12-Bank B), (P11-Bank B), (P14-
Bank C).

In summary, the influence of environmental uncertainty on DM is low for introducing

new technology, accepting Islamic Muarabah and providing training. The major source
of unpredictability arises from legal and governmental regulations affecting the banking
sector. Banks are more predictable about the kind of information to be collected and the
actions needed for introducing a new technology and implementing training in
comparison with Islamic Murabaha. The source of uncertainty in implementing Islamic
Murabaha comes from the Murabaha contract, political and state rules.

Performance

Performance in the present study was defined as how a firm performs in comparison to
companies similar in size and industry, not only on financial indicators of performance,
but also on non-financial indicators (table 5.3 (section 5.2.9), table 5.4 (section 5.3.9),
table 5.5 (section 5.4.9), table 5.6 (section 5.5.8) and table 5.7 (section 5.6.9).

From the analytical evidence and supporting comments and the documentation, the
bank found that these indicators were good and could be relied upon in comparisons
between banks of similar in size and industry.

For financial and business performance (in addition to respondents‘ comments above),
the present study shows that the financial performance of the banks was high, and
through the increase in market share, and the return on assets and operating profits as
well, they were able to cover all cost (e.g. new technology SD Bank A: (P1-Bank A).
As well as the operational efficiency of the bank in terms of exploiting the resources
available and controlling costs (P2-Bank A).

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For non-financial performance, as interviewees‘ comments showed earlier in this
section, during the making of the ‗new technology SD‘ and ‗Islamic Murabaha SD‘,
Bank A had a good measure of operational efficiency in terms of exploiting the
resources available and controlling costs (P2-Bank A). Also Bank A‘s employees were
satisfied and motivated: (P3-Bank A), (P5-Bank A). In the ‗Training SD‘ Bank C used
a new approach, which gave more attention to the satisfaction of the human element and
providing appropriate facilities for them, and because of its positive effect there was an
improvement in services provided to customers and the reputation of the bank: (P14-
Bank C), (P14-Bank C).

For the ‗Islamic Murabaha SD‘ and ‗Training‘ SD Bank B, in addition to the financial
situation being good, the decision makers believed they had non-financial advantages:
(P7-Bank B), (P9-Bank B), (P11-Bank B).

In summary, the strong financial position of the three banks in terms of the availability
of financial and human resources and good operating efficiency, showed that
performance of the banks had an impact on their SDMP.

Decision Effectiveness

From the results in table 6.3 (section 5.2.10), table 6.4 (section 5.3.10), table 5.5
(section 5.4.10), table 6.6 (section 5.5.10) and table 5.7 (section 5.610), the Banks
achieved decision effectiveness for the five strategic decisions.

The evidence for Bank A shows effectiveness both for the ‗new technology SD‘ and the
Islamic Murabaha SD‘: (P1-Bank A), (P2-Bank A).For Bank A, combining the views of
(P1-Bank A) and (P3-Bank A), the aims were achieved, and there was risk reduction,
and the Bank introduced new services quickly, and launched operations with
international Banks. As the comments showed, however, there was some degree of
resistance to change, as some customers did not welcome technology based banking.
This can be attributed to the influence of culture on individuals, in terms of the extent to
which they accepted new technology: (P2-Bank A) and (P3-Bank A). While conducting
observation within Bank A, the researcher observed that some employees were not
happy about the New Technology strategic decision in their bank. Nevertheless, they
had to' do their best to make a success of that strategic decision regardless of their

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opinion about it. And this might depend on the culture within which organisations
operate.

For the ‗Islamic Murabaha SD‘ evidence for Bank A (see Table 5.5), the customers
welcomed the Islamic Murabaha decision, as it embraced Islamic Sharia. The decision
transformed the way things were done in the Bank, making progress in using the Bank‘s
funds, and therefore it is possible that religion and culture had an effect on the making
of this SD , thus Bank A achieved decision effectiveness in this SD. (P5-Bank A), (P6-
Bank A).

Bank B, served as a case-study for both the ‗Islamic Murabaha SD‘ and the ‗Training
SD‘, and the findings show similarity with those of Bank A. Both SDs show that the
decisions were effective: (P7-Bank B), (P12-Bank B). Further evidence for Bank B
indicates that ‗Islamic Murabaha SD‘ was a chance to gain more confidence from the
majority of Muslim customers and to respond to offers from Qatar and Egypt: (P8-Bank
B), (P7-Bank B). The evidence of learning new ways of doing things reported above
was also evident in the findings for Bank B for the ‗Training‘ SD: ( P10-Bank B).

The findings for Bank C show how the decision was effective in achieving the goals
that the Bank was looking for, and achieving their organizational outcome. The
interviewees also maintained that the decision was very necessary to help improve the
skills of their staff, respond to the needs of customers, and also meet the changes in the
international area (P13-Bank C), (P14-Bank C) and (P13-Bank C).

Managerial factors influence the level of performance of strategic decisions (Steinmetz

and Kline, 1976; Covin and Slevin, 1989). Elements that fall into such managerial
factors/influence would include procedural rationality, intuition and political behaviour,
uncertainty of the decision, decision motive, and environmental uncertainty, amongst
others. Other factors may have contributed to the good performance of the Banks.

By looking at the empirical data which were collected through semi-structured

interviews, documentation, and participant observation, this study concludes that the
three banks in Libya followed a similar approach to making strategic decisions.

All of the decisions were crucial to the future success and survival of the three banks.
The senior management grope responsible for making their decisions was relatively

165
inexperienced, and there was external pressure from the Central Bank to follow its
policy guidelines. These pressures resulted in a high degree of anxiety to make a ‗good‘
decision, and the senior work followed careful rational processes as a result, with low
political or intuitive

Combining the overall evidence gained from this study, the SDMP for all five decisions
in the Banks is presented in Figure 6.2.

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Figure 6.2: Interpretive Framework

Crucially important
The availability of
strategic decisions for financial resources and
the banks time to analyse decisions

The adoption of
Pressure from the A high degree of rational analysis and a
Central Bank to anxiety in the senior co-operative approach Decision-
follow policy management group to decision-making
effectiveness
guidelines rather than intuitive or
politically motivated
activities

A relatively in-
Munificent environment
experienced senior which supported a
management group rational analysis

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7.3 Discussion of the Findings Compared with other Studies

The managerial emphasis of this study, (as Figure 6.2 shows) shares similarities with
the holistic approach (Pettigrew, 1992) that highlighted three intellectual traditions in
managerial elites, namely the study of institutional and societal power, the study of
boards and directors, and the composition and correlates of top management teams.
Following that holistic perspective, the findings from the present study are explained in
comparison with a number of selected publications on SDM. The present study‘s
findings are compared against those of Pettigrew (1992), Eisenhardt (1989), Eisenhardt
and Bourgeois (1988), Dean and Sharfman (1993-a), Fredrickson and Mitchell (1984),
Papadakis et al (1998), Elbanna and Child (2007-a), Elbanna and Child, (2007b),
Dean and Sharfman (1993-b) and Dean and Sharfman (1996).

Firstly, these studies have been selected for the comparative discussion because they
explored features of SDMP that have been included in this study. Secondly, these
studies reflect theoretical foundations that are necessary for explaining the findings
from the present study. In this comparative discussion two steps are taken. In the first
step, the respective studies are defined, pinpointing their objectives, methodological
approach (including the method of analysis, sample used and the context of the sample),
and the key conclusions of the studies. In the second step, the results from the present
study are compared with those studies, highlighting areas of differences or similarities.
In this connection too, the possible reasons for the differences or similarities are
explained.

Pettigrew (1992)

Managerial elites were studied by Pettigrew (1992). Specifically, that study, which is
based on synthesis and critical review, examined three intellectual traditions in the study
of managerial elites: interlocking directorates and the study of institutional and societal
power, the study of boards and directors, and the composition and correlates of top
management teams. Pettigrew‘s study concludes that all three research areas have
strengths and weaknesses, and have made some contribution to knowledge about
managerial elites. Incremental developments are however possible in the
conceptualisation and method used in all three areas (Pettigrew, 1992). For the
incremental development target, Pettigrew (1992, p.177) suggests that all three research
168
areas, “share the common limitation of studying managerial elites several paces from
the actors, processes and issues facing those elites”.

There is need to change approach so that we can understand better: (1) why directors
form ties across the boundaries of their own organization; (2) to what purpose such ties
are put and what issues are created or resolved; (3) the mobilisation and use of power to
achieve outcomes in line with perceived interests; and (4) whether and to what extent
top management teams exist and through what processes the team fashions its impact.

The managerial role in the SDMPs found in the present study provides insights that
connect to managerial elite theory Pettigrew defines the parameters thus:

“The interest is in those who occupy formally defined positions of authority,

those at the head of, or who could be said to be in strategic positions in private
and public organizations of various sizes” (Pettigrew, 1992, p.163).

Pettigrew‘s study underlines, there is also importance in the behavior of groups of

actors as they operate as boards of directors, executive committees or top management
teams. “the question of the relative power of managerial elites and others is a crucial
empirical issue” (Pettigrew, 1992, p.163).

The present study suggests that those at the strategic apex of the organization have
much power and influence, and may try to use these to influence their decision patterns.
The present study supports the logic that how such senior position holders use their
powers and influence in organizational strategic decision process is constrained by the
„countervailing influence‟ (in- and outside the organization) and rules, traditions and
other institutional arrangements (Pettigrew, 1992; Herman, 1981). This is because (1)
organizations do not have unlimited resources, and (2) they are also controlled by the
external forces in the marketplace. This is consistent with the analysis undertaken in the
present study. The present study found that the powers of the senior position holders in
the SDMP are influenced by Central Bank policies, growing competition, uncertainties
and risks attached to decisions being made, religious issues, the importance of the
decision etc.

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The similarities pinpointed above can be explained by a number of reasons:

1. The top management (as defined under managerial elite) in any organization are
usually the main actors in the DMP,
2. They operate with the interest of making and implementing decisions that would
improve the performance of the organization. For this reason, they must find a
means of effectively managing the internal and external environment of the
organization, as well as government policies, culture and religious-based
matters,
3. In this target of effectively managing the operational circumstances of the
organization, procedural rationality is given much attention, and there is low
political behavior and use of intuition in the DMP, most especially, as the
decisions are considered strategically important.

Finally, the top management capacity and role as presented in this study provides
support for the view that boardroom and other top influences are not only shaped by the
activities of actors at other levels in and outside the firm, but also by a much broader
range of contextual forces and processes emanating from economic, political, and
industry sector conditions (Pettigrew, 1992, p.173). For example, in the present study,
there is evidence that top management capacity was exercised with full consideration of
the decision motives, decision importance, as well as taking into consideration the huge
investment that needed to be made to into the strategic decision, an additional factor that
made the decision makers avoid risky steps in their DM .

Eisenhardt (1989)

Eisenhardt‘s study examined agency theory and its contribution to organization theory.
The study concludes that agency theory offers unique insights into information system
outcome uncertainty, incentives and risk. Principally, Eisenhardt (1989) recommends
that an agency perspective has much relevance in a problem situation that involves a
cooperative structure.

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Agency theory has several links to mainstream organizational perspectives (Eisenhardt,
1989). According to the cooperative behavior context (Barnard, 1968), the heart of
agency theory is goal conflict inherent when individuals with differing preferences
engage in cooperative effort. Agency theory is also similar to political models of
organizations (Eisenhardt, 1989), and both agency and political perspectives assume the
pursuit of self-interest at the individual level and goal conflict at the organizational level
(e.g., March, 1962; Pfeffer, 1981 cited in Eisenhardt, 1989, p.63).

The results of the present study underline this differing preference feature amongst
people engaging in cooperative efforts. Empirically, the decision makers exhibited
differences in their interests and preferences for certain decisions. However, in general
the best option for the interests of organization was followed to ensure that
organizational well-being was not sacrificed for personal interests.

The present study supports theories that pursue efficient processing of information as a
criterion for choosing among organizational options (Galbraith, 1973 cited in
Eisenhardt, 1989). In the contingency approach of the Banks, efficient gathering and
analyzing of information is undertaken to achieve ‗optimal‘ DM (e.g., Galbraith, 1973;
Lawrence and Lorsch, 1967 cited in Eisenhardt, 1989). Logically, this approach is
rational, as it enables the decision makers to examine the decision options and follow
the option that will yield decision effectiveness.

One other contribution of agency theory is its risk implications (Eisenhardt, 1989).
Environmental effects such as government regulation, emergence of new competitors,
and technical Innovation can affect outcomes. According to agency theory (Eisenhardt,
1989), a new and small firm has limited resources available to it for weathering
uncertainty: As the likelihood of failure looms large for such a firm, the principals may
become risk-averse. Eisenhardt (1989, p.65) Predicts “that such managers will be very
sensitive to outcome uncertainty”.

The results from the present study provide evidence that connects to the risk attitude. In
their DMPs, the Banks were very cautions in taking steps with uncertain outcomes,
especially as the SDs were considered very strategic to the future of the Banks. The
Banks were also very cautions in the DMP when the resources committed to the SD
project were considered substantial for the Bank.
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Furthermore, the results of the present study support the agency theory logic of
considering environmental effects, such as government regulations, emergence of new
competitors and technical innovations. The model summarized in Figure 7.2 pinpoints
how a number of such environmental factors influenced the SDMPs of the Banks.

The similarities of the present study with the aforementioned models can be explained
by a number of reasons. First, attitudinal differences are normal among people, and may
be displayed through political behavior at key levels of the DMP. Differences in
interests and preferences are normal amongst people and in groups. Bargaining and
negotiation are also logical approaches in such situations, as part of a process towards
reaching a common ground in SDM.

Finally, organizations aim to maximize wealth and provide shareholder value. To do

this, SDM rationality may be dominant factors. In seeking that target, the cautious risk
position captured in this study is a logical expectation.

Eisenhardt and Bourgeois (1988)

Using eight firms, Eisenhardt and Bourgeois (1988) used ‗midrange‘ theory linking
power, politics and performance, which examined how politics affects the strategic
decision process of top executives in the ‗high velocity‘ microcomputer industry.
Midrange theory aims to integrate theory and empirical research. They found that
politics, the actions by which executives enhance their power to influence decisions,
arise from power centralisation. In their study power was organised into stable
coalitions based on demographic characteristics such as age and office location. Finally,
Eisenhardt and Bourgeois‘ study suggested that politics in top management teams was
associated with poor performance.

In the present study, empirical evidence does not permit us to agree or disagree with the
notion that politics in teams was organized around stable coalitions whose membership
was not based on issues but on demographic characteristics such as age, job title, and
office location. The reason is that we did not seek to identify characteristics that drove
political behavior, rather we gauged how political behavior is exhibited in the SDMP.

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Eisenhardt and Bourgeois argued that the use of politics in high-velocity environments
is associated with diminished firm performance. Explaining, Eisenhardt and Bourgeois
(1988, p.765) noted that “politics are time-consuming and information-restricting,
creating communication barriers and inflexibility within a team”.

The present study provides support to Eisenhardt and Bourgeois (1988) on this point of
politics causing delays and withholding of information in the DMP. Further support
concerns the influence of politics on organizational performance. In the present study,
strategic decision effectiveness was examined. Overall evidence showed that the
decision makers of the Banks did not show political behavior in the SDMP. Rather,
committed effort was made to ensure procedural rationality in the making approach,
which provides further support to Eisenhardt and Bourgeois (1988). The message from
this is that when acting politically, decision makers may sacrifice the best interest of the
organization. However in the present study no significant evidence of political behavior
was found in any of the decisions, and the decisions were found to be effective,
supporting Eisenhardt and Bourgeois‘ findings.

In their study, Eisenhardt and Bourgeois concluded that effective firms follow a rational
approach to DM. This study shows that in their committed effort to ensure that strategic
decision effectiveness and subsequently overall organizational performance was
achieved, the efforts of the Banks were geared towards achieving procedural rationality
in their SDMP. Rational steps were taken to ensure that clear strategic decision aims
were achieved, adopting relevant measures to adapt to the demands of their
environment. Political behavior and intuition-based thinking were not common features
of their SDMP.

A number of explanations exist for the similarities between the present study and that of
Eisenhardt and Bourgeois. On rationality, it is to be expected that organizations that aim
for procedural rationality will seek to avoid political behavior and the use of intuition in
their DMP. Allowing individual interests and preferences to prevail over organizational
interest, or basing their decisions on intuitive thinking could have serious negative
performance implications.

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Dean and Sharfman (1993a)

In a study of 57 strategic decisions in 24 companies, Dean and Sharfman (1993a)

surveyed multiple informants and a structured interview protocol. They found that

Environmental competitive threat, perceived external control of the

organization, and the uncertainty of the strategic issues being addressed
are related to procedural rationality (p.587).

For the purpose of our comparative discussions, three conclusions in Dean and
Sharfman are elaborated, namely: (1) Competitive threat1 in a firm‘s environment
decreases rational procedures in DM , (2) External control2 relates significantly to
procedural rationality, thus, higher levels of external control are associated with less
rational procedures SDM, and (3) uncertainty of the strategic issue relates highly to
rationality, therefore, decision-makers will engage in a less rational process of SDM
when faced with problems characterized by a high degree of uncertainty.

Analyzing the above conclusions relative to the findings of SDMP in Libyan

Commercial Banks, supportive and contrasting evidence is found. Concerning the
competitive threat conclusion, the model captured in the present study suggests that a
growing competitive threat from other banks will positively influence procedural
rationality in the SDMP. The explanation for this is that organizations intensify their
rational efforts to ensure success of the strategic decision: the contrary would expose the
banks to the risk of losing their major investments. It is interesting that despite a
munificent environment (see Figure 6.2); intensified procedural rationality was still
pursued by the Banks. This may be explained by the nature of the SDs that the Banks
were engaged in, and also connected to the risk averse behavior of the decision makers.
It could be that religion, cultural factors, and social responsibility features of the SDs
had an influence.

1
Dean and Sharfman (1993) –“competitive threat reflects both competition and (lack of)
munificence, that is, the 'dangerousness' of the organization's environment. ….This measure increases
as competition increases and decreases as munificence increases” (p.596).
2
Dean and Sharfman (1993) – “Some of the firms in the study were family owned, others were
publicly held, and the rest were operating divisions or subsidiaries of other firms” (p.596).

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Based on environmental munificence and environmental uncertainty, the present study
does not confirm Dean and Sharfman, who found that environmental uncertainty did not
moderate the relationship between SDMP dimensions and SD effectiveness. The present
study suggests that when there is environmental uncertainty, more procedural rationality
is employed, and this influences the level of strategic decision effectiveness.

Regarding control, the results from the present study support Dean and Sharfman
(1993a) Due to the external control influence of the Libyan Central Bank, more rational
procedures were followed in the SDMPs to secure effectiveness.

The results from the present study support Dean and Sharfman in terms of the
suggestion that the perceived magnitude of impact of a decision is among the strongest
explanatory variables of DM behavior, as decision-makers act more rationally when
decisions imply important consequences. Empirically, the Banks sought more
procedural rationality in their DMP, because they judged the SDs to be of critical
importance. Consequently, a clear motive was evident: to encourage a rational approach
to achieving SD effectiveness. Overall, this drive for a rational approach explains why
the banks did not embrace political behavior or intuition in their DMP.

Fredrickson and Mitchell (1984)

In a study of an industry with an unstable environment, involving 109 executives in 27

firms, Fredrickson and Mitchell (1984) combined both structured interviews and
questionnaires, and suggested a model that views `comprehensiveness` as a measure of
rationality. They define comprehensiveness as the extent to which an organization
attempts to be exhaustive or inclusive in making and integrating strategic decisions. In
an unstable environment they found that there was a consistently negative relationship
between comprehensiveness and performance.

When strategic decision effectiveness is high, there is logical ground to believe that
organizational performance will be enhanced. In the present study, SD effectiveness
was explored, while Fredrickson and Mitchell (1984) explored organizational
performance (return on assets and growth in sales). The present study contrasts with
Fredrickson and Mitchell (1984) who suggested a negative relationship between
comprehensiveness and performance. Empirically, the present study suggests that when

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rational procedures are followed in a SDMPs, then strategic decision effectiveness is
achieved. If an organization adopts a comprehensive approach towards ensuring
procedural rationality, as was the case with the banks in the present study, they will
make a dedicated effort to gather and intensively analyse information, and their options.
This will involve rational procedures which contribute to SD effectiveness.

An explanation the present study offers is that the strategic decision processes explored
by Fredrickson and Mitchell (1984) reflected a highly unstable environment. In the
present study, the environment was highly stable. Beside this environmental difference,
another factor is the different cultural contexts of the two studies. A factor that could
also explain the contrast is that the two studies explored quite different strategic
decisions. Fredrickson and Mitchell (1984) explored only one strategic decision; while
the present study was of five strategic decisions.

Papadakis et al., (1998)

The study of Papadakis et al., (1998) covered 70 SDs in 38 Greek manufacturing firms.
They combined questionnaires and interviews, as well as archival documents. Papadakis
et al., present a model that investigates the relationship between the SDMP and
management and contextual factors. Three process dimensions were explained: (1)
decision-specific characteristics, (2) top management characteristics, and (3) contextual
factors referring to external corporate environment and internal firm characteristics.

In their model, Papadakis et al., found that rationality was affected by decision-specific
characteristics and internal context. On this point, the present study provides support for
Papadakis et al., and underlines the fact that an SD‘s magnitude of impact, and the type
of SD, are core decision-specific characteristics. Also, the present study supports the
view that planning formality and ownership/control are the dimensions of the internal
context which exerts significant influence on rationality in the SD-making process.

The present model supports Papadakis et al., concerning the view that SDs relating to
capital investment and internal reorganization call for a rationality-based DM approach.
The Banks were very careful to avoid risky steps, taking into consideration that much
was invested into the SDs. An explanation for these similarities is based on the simple

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logic that when organizations invest major resources into their projects, committed
efforts are made to ensure success, and improving shareholders‘ value.

Papadakis et al., (1998) also argued that environment and management factors are
insignificant. The present study does not support that conclusion. Instead, the evidence
in the present study suggests that there is a relationship between environmental
dimensions and rationality of SDM. The results from the present study indicate that
Banks intensified their drive for procedural rationality as a way of coping with
environmental uncertainty (see Interviewee P7-Bank B‘s comment in section 7.3.8).

An explanation for this finding is that decision makers will be more committed to
procedural rationality in their SDMP when there is environmental uncertainty. The
difference between the findings of the present study and Papadakis et al., may relate to
context (country and/ or industry) difference(s). In the context of the present study,
culture and religion were influential factors on the SDMP.

Another contrast of the present study to Papadakis et al (1998) is the issue of

management factors. The present study found that in times of environmental
uncertainty, management plays a major role in ensuring rationality in the SDMP.
Management factors include, for example, taking risk-averse steps to ensure that the
future of the organization is not endangered.

Elbanna and Child (2007a)

Elbanna and Child present a model of strategic decision effectiveness that highlights
three key variables in the SDMP: process dimensions (rationality, intuition, and political
behavior); moderating variables (decision-specific, environmental, and organizational
factors); and outcome variable (strategic decision effectiveness). The study involved
two stages and combined both quantitative and qualitative tools. The study examined
117 Strategic decisions in 9 industries in Egypt.

The results from the present study show similarities and contrasts with the findings of
Elbanna and Child. First, the present study supports Elbanna and Child in finding that
strategic decision effectiveness is correlated positively with procedural rationality in the

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DMP. Secondly, the present study supports Elbanna and Child‘s overall findings that
political or intuitive behavior may reduce strategic decision effectiveness.

According to Elbanna and Child, decision uncertainty may have a different influence on
the link between each of the SDMP dimensions and strategic decision effectiveness.
The evidence from the present study seems to support the view that decision uncertainty
moderates the relationship between rationality and strategic decision effectiveness. In
the present study, although the decisions were reasonably certain, procedural rationality
was followed. This approach may have been influenced by the nature of other
moderating environmental features of the banks.

As shown in Figure (6.2) the Banks enjoyed a munificent environment, despite a

growing competitive pressure from other Banks. Putting together the overall
environmental evidence, a low level of environmental uncertainty existed. The Banks
wanted to ensure procedural rationality and less political behavior and intuition in the
DMPs. Based on the evidence, the present study supports the view that environmental
uncertainty does moderate the relationship between SDMP dimensions and strategic
decision effectiveness (Elbanna and Child, 2007).

Finally, and concerning intuition, Khatri and Ng (2000) reported that intuitive synthesis
is positively related to organizational outcomes. The differences in contexts (country
and industry) in these studies may explain the differences in findings. Furthermore, the
differences in the moderating variables for each study may prompt different SDM
actions to be deemed suitable. For example, in the present study each SD was deemed
critical to the future of the organization, and since the decision makers believed
substantial financial investments were involved in the SD plans, managers felt the best
thing to do was to avoid taking risky steps, with a careful analysis of consequences.

Elbanna and Child (2007b)

The study of Elbanna and Child examined 117 strategic decisions in 9 industries in
Egypt. The study involved two stages and combined both quantitative and qualitative
tools. The study suggested an integrated model of SDM rationality which identifies
decision, environmental and firm characteristics as influences on the rationality of
decision processes.

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The model presented in the present study (see Figure 6.2) reflects a process model that
pinpoints issues that managers take into consideration in their SDMP.

Comparing both models, there are similarities in the findings. Both models agree that
SDM rationality is affected by decision-specific characteristics and environmental
variables. Like Elbanna and Child, the model from the present study indicated that
environmental variables would significantly shape DM rationality.

Unlike Elbanna and Child, where political uncertainty in Egypt was a major threat, the
present study suggests economic and market factors and Central Bank -led initiatives as
important influences. Commenting on the state of environmental instability, one
interviewee pointed out how such circumstances prompt them to be proactive:

“....... the growing competition in business would force us to be concerned about

the development aspects to retain our share in the market. This in turn requires
renewal and continuous innovation of the various tools in bank procedures to
increase productivity and reduce costs. Again, this requires innovation and
creation of highly skilled staff in technical, administrative and other fields.” (P7-
Bank B)

Thus, the Banks operate under increasing environmental uncertainty, a situation that
poses high demand on them to find suitable ways of adapting and surviving. For such an
environmental situation, a more procedural, rational, based DMP with less political
behavior and intuition was adopted. The Banks were keen to gather and analyse
information, and use experience-generated knowledge, rather than intuition-induced
thinking, in their SDMPs.

The regulatory influence of the Central Bank, and the influence of Sharia, meant that the
banks also paid attention to welfare needs and social responsibility factors. The
evidence showed that managerial efforts to ensure strategic effectiveness were not only
aimed at achieving financial performance targets, but also giving attention to social
welfare needs.

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Dean and Sharfman (1993b)

Despite the importance of rationality and political behaviour in the DM literature, little
is known about the relationship between these dimensions (Dean and Sharfman, 1993b).
Dean and Sharfman asked the question: “Can decisions be made using both rational
and political methods, or must managers use one approach or the other”? (p.1069)

Based on a study of 61 strategic decisions in 24 companies, they offer insights in this

connection. The findings from the present study are discussed comparative to their
findings. Their response to question suggests that there is need not to

“speak of decisions as rational or political, as if they must be one or the other.”

Rather, “decisions could be procedurally rational and not at all political, or vice
versa, since the two dimensions are uncorrelated.” (p.1077)

They thus argue that decisions can be both procedurally rational and political, or
neither. They argued further that procedural rationality and political behaviour are
uncorrelated. A typical example of such is a scenario involving a combination of
analysis and influences leading to the “decision by a product division of a large,
diversified corporation to close its European plant, and do all its manufacturing the
US” (p.1077). In such a scenario, political behaviour and procedural rationality could be
jointly reflected in a decision process. The present study contrasts with that view,
empirically (see Figure 6.2), the Banks gave much attention to procedural rationality.
Less political behaviour or intuition based steps were taken because decision makers
saw these as risks, with the potential to harm strategic decision effectiveness.

Dean and Sharfman explained their evidence: if decision makers were to be driven by
political behaviour, they would aim mainly to satisfy their own interests and
preferences, rather than placing the interest of the organization first. For such political
behaviour targets, the decision makers would not have need to invest much time trying
to analyse the issues relating to the strategic decisions to achieve procedural rationality.
The logic suggested here is that decision makers who aim for procedural rationality
would suppress their political behaviour.

The nature of company and type of strategic decision (the present study argues) may
shape whether, and extent of use of, both procedural rationality and political behaviour.

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Explaining their claim that rationality and politics are independent dimensions, Dean
and Sharfman flagged four cases of DM in their sample that represent possible
combinations of rationality and politics.

The first case (high/low) involved a high level of rationality and a low level of politics.
In that case, a lighting control company aimed to establish a subsidiary in England, as a
means of increasing sales in Europe. Decision participants collected and used a great
deal of information in making this decision, and gave it high ratings for rationality. This
evidence of rationality and politics is very similar to the findings in one of our cases: In
the Islamic Murabaha SD, there was high procedural rationality but also low political
behaviour, suggesting and supporting Dean and Sharfman that both procedural
rationality and political behaviour might be used in one decision process, because of the
dynamics of the decision. This seems to be the case when several stages are involved in
the decision process.

This finding underlines two points: (1) when organizations prioritize rationality, very
low political behavior is shown, and (2) this combination is appropriate when it suits the
type of company and the nature of their activity, and decision type. Analyzing this
evidence in relation to strategic decision effectiveness, and comparative to relevant
literature, the present study offers insights that support the conclusion of Dean and
Sharfman. In their conclusion they commented:

“to summarize the outcomes of these four decisions, high rationality and low
politics resulted in success,..….… While this is only four cases, the pattern
appears to be that procedural rationality is associated with more successful
decisions, and politics with less successful decisions”.

In this present study, high procedural rationality and very minimal (one case) political
behavior was captured, evidence that permits the conclusion that high procedural
rationality can lead to strategic decision effectiveness.

Dean and Sharfman (1996)

In a study of 52 decisions in 24 companies in 16 industries, Dean and Sharfman (1996)

examined whether SDMPs were related to decision effectiveness. Their model
concludes thus: (1) Procedural rationality is positively related to decision effectiveness,
(2) political behaviour is negatively related to decision effectiveness, (3) environmental
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favourability is positively related to strategic decision effectiveness, and (4)
implementation quality is positively related to strategic decision effectiveness.

Based on the emergent findings, the present study concludes that strategic decision
processes influence SDM effectiveness, adding support to Dean and Sharfman. In the
present study, one case of low use of political behaviour was found. On the overall
evidence, the present study supports Dean and Sharfman (1996, p.388) that “managers
who collected information and used analytical techniques made decisions that were
more effective”.

An explanation for the results of the present study may be concerned with
organizational competitiveness, and chances of survival. To ensure their
competitiveness and chance of survival, organizations will try to organise their SDMPs
to ensure the effectiveness of their strategic decisions. Critical to this is the need to align
efforts to the importance of the decision, and also adapt to the environmental
circumstances of the organization.

7.4. Summary

The focus adopted was to address the research questions in section 6.1. The findings
were presented as the evidence from each Libyan Commercial Bank. To achieve the aim
of the study the findings for each Bank were presented for each theme, and differences
between the banks were used to explain how the circumstances of a firm shape its
SDMP. In the last section of this chapter (section 6.3), the analytical findings were
explained and compared with other related studies. The approach followed in that
section identified similarities, and also dissimilarities, with explanations.

The top management teams played a paramount role in the strategic direction and of co-
operative DM of the banks. In their (top management team) role in the SDMP, political
behaviour and intuition (interests and preferences) based behaviour was sometimes
evident, but the emphasis placed on rational approaches was driven by anxiety of the top
management teams in terms of the crucial importance of the decision, some policy
pressure from the Central Bank of Libya and the relative inexperience of the senior
management group, in terms of the strategic decisions taken.

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 CHAPTER SEVEN: CONCLUSIONS

7.1 Introduction

This chapter presents the final results and explains how these results contribute to
knowledge, both theoretically and practically. This chapter is presented as follous:

1- Research Approach (Section 7.2);

2- Summary of Findings (Section 7.3);
3- Contributions of the Research (Section 7.4);
4- Limitations of the Research (Section 7.5); and
5- Recommendations for Future Research Directions (Section 7.6).
6- Personal reflections (Section 7.7).

The aim of this research, as defined in chapter one is:

To explore and critically analyse the nature of the SDMP in Libyan commercial banks and

the impact of environmental and contextual aspects on that process.

With this aim, the study has addressed the following research questions:

Q1. What are the key factors influencing the SDMP in Libyan commercial bank?
Q2. What is the relative importance of `rationality`, `intuition`, `political behaviour` in
SDMP?
Q3. What is the influence of contextual factors on the process?
Q4. What is the influence of perceived `decision importance` on the process?
Q5. What are the key factors influencing SD effectiveness?

The theoretical foundations relevant to the aim of this study were presented in chapter 3,
and the framework for this study was presented in chapter 3, and the methodological
approached defined in chapter 4. The empirical findings in relation to the research

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questions were presented in chapter 6 and discussed in comparison to other relevant
studies in chapter 7.

7.2 Research Approach

The context of this study is the Libyan commercial banking sector. This sector operates
within a less developed economy, and one that is relatively unexplored. For that reason,
an interpretative approach was adopted in this study to address the research questions.
The study has employed a qualitative methodology using semi-structured interviews as
the main method of data collection. Documentation and observations were also
employed to gather other information about the SDMP.

A qualitative approach was suitable for a number of reasons. It is an exploratory study,

and a qualitative approach is suitable for exploring managerial roles in SDMP, as this
allows for the identification of issues that may not be found by the use of surveys (Yin,
1994; 2003; Styhre et al, 2010).

7.3 Empirical Results

In chapter 6, Figure 6.2 presents an interpretive framework from this study. In this
section (7.3) the key findings related to the five research questions themselves are
summarized.

Q1. What are the key factors influencing the SDMP in the Libyan commercial
bank?

The role of top management was a critical factor in the SDMP. This factor played a
major role concerning the extent of use of procedural rationality, political behaviour and
intuition in the DMP. Also, it had a major influence on how decision importance,
motives and uncertainty of the decision elements of the SDs were approached.

Rationality was a key factor in the SDMP and a high focus was given to gathering and
analysing information for the SD. To obtain the information, collective cooperation
existed between executive and staff by virtue of friendship and personal relationships.
The organizational culture in the banks impacted on the internal work environment of
the bank. When there was a need to analyse the collected data for DM, all banks
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indicated that they lacked qualified staff, advanced technology and a standard
information database, and they used external expertise.

The senior managers group cooperated rather than allowing the formation of political
alliances to shape their decision process. As Figure 6.2 shows, the anxiety of the senior
management group was influenced by three core factors, namely, (1) crucial importance
of the strategic decisions, (2) the policy guides defined by the Central Bank of Libya,
and (3) highly inexperienced senior management group. The decisions had to depend on
past experience even though this derived from very different circumstances rather than
on personal judgement. For example, banks learnt from other banks to see what they
have done in the area of Islamic Murabaha and what level of experience they had in
Islamic Sharia.

None of the Banks reflected strong political behaviour in their SDMP. Instead, decision
makers relied on constructive consultation to make their SDs, which shows the
influence of the organizational culture of staff on the SDMP, and a high degree of
transparency among the decision makers in the SDMP. Minor degrees of political
behaviour were displayed in the Islamic Murabaha SDMP. The use of committees,
authorities and legal provisions had a significant influence on the decision processes.

The importance of the SDs was seen as critical to the organizational outcome and future
performance of the Banks. When making the SDs opportunities to expand banking
activities inside and outside the countries were considered.

Q2. What is the relative importance of `rationality`, `intuition`, `political

behaviour` in the SDMP?

It was found that procedural rationality is an important SDMP factor, and that it had no
relationship with political behaviour and intuition. The analysis showed that the SDs
were made based on facts and information, past experience (where available) or lessons
learnt from other banks. There was limited use of personal judgement, influence and
power in SDMP.

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In some circumstances, however, political behaviour was used along with procedural
rationality. For example, in the case of the Islamic Murabaha SD, Power from top level
was used for the sake of organizational interest, so that opportunities for banking
activities could be expanded inside and outside the country. This decision was made
after constructive consultation in order to understand the impact of organizational
culture on the staff in the environment of the bank, and maintain transparency among
the decision makers in the SDMP.

Essentially, this study shows that the Libyan commercial bank sought to use procedural
rationality, and not political behaviour or intuition, because this approach was perceived
to help them to be successful, and ensure that the future of their organization was not
threatened. A rational approach was adopted, because they were able to invest time,
money and effort into their strategic decisions. The Banks seem to have avoided risk
and adopted a cautious approach, reflecting some anxiety due to a lack of experienced
staff. Overall, the banks adopt rational procedures in response to the driving forces of
core importance of the strategic decisions, policies from the Central Bank, and the
inexperience of the senior management group in such strategic processes.

The empirical finding of procedural rationality and minimal political behavior and
intuition in this study suggests that the environment of an organization, including the
availability of financial resources and teamwork between staff and the availability of
investment opportunities and stability of environmental competitiveness shape the
rational of the SDMP. On the evidence from this study, rationality and intuition were
mutually exclusive, while some minor level of political behavior was used along with
procedural rationality.

Q3.What is the influence of contextual factors on the process?

This study found that the influence of contextual factors was as expected in terms of the
DMP of Libyan commercial banks. Religion and culture were one such factor; for
example, in the SDMP of the Libyan banks, the position of the Islamic religion was
taken into consideration.

Doing this was important because, the customers valued an adherence to their religious
position in the way they lived their lives. Doing the contrary would have placed the

186
banks at a disadvantage relative to their competitors. In addition, organizational culture
influenced the decision-making process through the cooperation and support among
groups, which was a part of the customs and traditions of kinship among Libyan people.

The Libyan commercial banks‘ SDMPs were influenced by policy set by the Central
Bank of Libya, which resulted in delays and complexity in administrative procedures
within the three banks; banks were also required to comply with Central Bank
regulations and policies, or be subject to their sanctions.

Also, from the interview evidence, other contextual factors that influenced the SDMP
included munificence and risks connected to each strategic decision. These factors had
an influence on shaping top management tendencies concerning the use, or not, of
rational, intuitive, or political behaviour. Importantly, there was anxiety on the part of
decision makers due to the critical nature of the decisions reference. For this reason,
they prioritized the need to avoid steps they perceived as risks. As the strategic
decisions were considered critical to the future of the banks, organizational resources
were invested, and managers were risk averse in their SDMP.

Q4. What is the influence of perceived „decision importance‟ on the process?

Empirically, perceived decision importance had a huge influence on the DMP.

Consequently, careful steps were taken to ensure that the strategic decisions were
carefully taken, especially as there was a lack of relevant experience.

Since the decisions were considered critical to the well-being of the banks, careful steps
were taken in the DMP, through careful gathering and analysing of information to aid
appropriate decisions. Rationality was prioritized over intuition in the DMP. For that
reason too, political behaviour was reflected (minimally) in only one of the explored
cases. Finally, due to the importance attached to the decisions, financial and human
resources such as time, money and effort were invested into the strategic decisions, and
careful efforts were made to avoid risky outcomes. The importance of the decision may
have led to a high degree of co-operative behavior among the top management group.

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Q5. What are the key factors influencing strategic decision effectiveness?

Two criteria were used to judge the ‗effectiveness‘ of decisions. The first criterion was
success in achieving the desire decision outcomes. Putting the interview results
together, success in achieving desired outcomes was evidenced through the extent of
improvement in customer services, and reduction in operational costs. Comments from
interviewees, documentation and observation indicated that there was improvement in
the quality of service provided to customers, and this led to reduced costs and time of
delivery to customers. Other measures included coping favourably with the level of
competition from other banks, drawing closer to customers, offering customers new
services, attracting new customers, and improved structural and administrative process.
All of these were mentioned by interviewees.

The second criterion for strategic decision ‗effectiveness‘ was hindsight: a belief that the
right choice was made, key measures indicated the successful embedding of Sharia law,
attracting new customers, causing a reduction in the migration of money, gaining new
contract offers from several reputable organizations, there was a positive culture change
amongst staff, and enhanced banking service developments because the banks were
improving internally, and in their relationships with customers.

Empirically, the rational approach adopted by the banks contributed to the perceived
effectiveness of the SDs. On the combined evidence of growing competitive pressure,
uncertainties and risks to each of the decisions, anxiety due to the importance of the
decisions, procedural rationality was followed in DMP, and was seen as contributing to
SD effectiveness. The role played by the Libyan Central Bank, as well as culture and
religious influences, also contributed to the drive for procedural rationality in the DMP,
and hence perceived SD effectiveness.

7.4 The Theoretical Contributions

Theoretically, this thesis offers several contributions. The framework for this study (see
Figure 4.1) presented an integrative approach that suggests that internal factors
(organizational and decision-specific) are influenced by managerial specific dimensions
(rationality, intuition and political behavior), which further influences strategic decision
effectiveness. The emergent model (see Figure 6.2) advances theoretical understanding

188
through a number of insights, and especially of the key role of `anxiety` in the top
management group.

1- The contribution from this study relates to the role of senior management in the
SDMP. Managers of the banks were found to use constructive consultation and
their contribution to aiding the collection and analysis of information were found
to be necessary steps that led to the adoption of a rational approach in the
strategic decision-making process, rather than adopting political or intuition
behaviour. Culture and religion were the internal factors considered to have had
the greatest influence on the decision making process.
2- The ability of the top managers group to exploit all the resources available to
the banks in terms of money and the time needed, (basing their performance
judgment on the return on assets, operating profits, and market share), allowed
them to follow a rational approach instead of relying on personal judgment; this
increased the success of decisions.
3- Another theoretical contribution of this study relates to munificent environment,
which supported a rational analysis due to the bank environment being safe and
without significant threats. This was because Libyan banks in general were
found to be governed by clear policies and strategies and plans to improve staff
skills. However, the study found an increasing trend of competition between
banks, suggesting that the environment will be less munificent in the future.
4- In terms of data analysis and the literature, this study offers a model for the
development of Libyan commercial bank. The key issue of this model is that the
level of anxiety in the senior management group was influenced by the critical
importance of the strategic decisions to the commercial bank; pressure driven by
the policies imposed by the Central Bank with inadequate regulation and
supervision, creating significant difficulties for banking institutions. In addition,
the relative inexperience of the senior management group in relation to these
decisions led them to rely on the experience of managers in other Arab and
foreign countries [see comments from interviewees, appendix (7)].
5- Another theoretical contribution of this study relates to the importance of the
strategic decisions, and how these decisions were critical to the organizational
outcome and future performance of the Banks. This explains why there was

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 excessive concern among senior management, and why their focused on
procedural rationality in their SDMPs.
6- The study adds to knowledge about how policies and regulatory roles, religion,
and culture influence the SDMP. The model (Figure 7.2) explains that, for
procedural rationality that is directed towards achieving strategic decision
effectiveness, top management show a tendency to risk-averse behaviour in the
SDMP. Theoretically, managers must manage the SD process having regard to
the influence of procedural rationality, political behaviour and intuition, keeping
in mind decision importance, the decision motives, and also managing the
uncertain elements of the decision. In this process of making strategic decisions,
the managers of the banks cooperated, rather than using political power or
intuitive behaviour to influence the SDMP.
7- The ‗independent dimensions‘‘ viewpoint of the SDMP (Dean and Sharfman,
1993a) argues that in ‗normal‘ SDMP, either procedural rationality or political
behaviour is used, but not both. On the other hand, that same study also found
that in special circumstances (e.g., in decision processes where several stages are
involved) the use of both was found. From the evidence for the ‗new technology‘
and ‗training‘ SDs, it was found that SDMPs that emphasized high procedural
rationality were subject to less political influence. However, the specific issues
involved in a SDMP might allow the use of both factors. For example, the
Islamic Murabaha evidence showed that where legal issues and government
interests were involved, the use of ‗past experience‘ and ‗political influence‘ was
likely. Evidence for the use of procedural rationality and political behaviour
supports the literature that ―decision processes can be a mixture of rationality
and politics but more of one is equivalent to less of the other‖ (Dean and
Sharfman, 1993, p.1072). There is however a need to emphasize that the level of
political behaviour for the ‗Islamic Murabaha‘ SD was low. Where political
behaviour was minimal, procedural rationality was a key component in the
SDMP.
8- Explaining the procedural rationality findings from this study, a theoretical
contribution relates to the debate about the impact of procedural rationality on
SD effectiveness and performance (Dean and Sharfman, 1993a; Elbanna, and
Child, 2007a). This study suggests that banks that used procedural rationality in

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 the decision processes achieved SD effectiveness. When the SD was seen as
very critical to the survival of the organization, and where a large financial
investment was involved, management was more cautious, and sought to avoid
risks. In this case, procedural rationality and not intuition or political behaviour
was a preferred SDMP. The ‗Islamic Murabaha‘ SD suggests that if decision
makers use political behaviour, but political behaviour does not dominate
procedural rationality, then decision effectiveness may be achieved .
9- Another theoretical contribution that emerged from this study relates to Central
Bank Policy. The banks made every effort to operate within stipulated Central
Bank guidelines. To do this, the banks ensured that they followed careful
rational steps and avoided risky steps, to achieve decision effectiveness. If these
banks had done the contrary, it is likely they would have lost their customers to
their competitors, and the loss of market share would have made them subject to
sanctions by the Central Bank of Libya.

7.5 Contributions to Practice

For managers involved in SDMPs, and especially for commercial bank in the Libyan
context, this study offers insights that may be of potential future use to senior managers
They reported their interest in being informed of the results of this study. In addition,
the study could assist managers in their current situation in improving future
performance regarding the process of strategic decisions in their banks.

Relative inexperience in senior management groups was crucial to the outcome of the
strategic decision process. Sufficient training courses for managers should be offered to
those involved in the decision making process. In addition, it is important to select the
most appropriate time for these training courses, and the correct content, as well as a
timeline which suits the managers. The concerned strategic decisions are important to
successfully achieving decision effectiveness.

According to these results, the three banks adopted at a rational approach and spent
considerable of financial resources and time. However, the top management group
could have relied on intuition behaviour, because the three banks depended on the
experiences of Arab countries and these countries succeeded in such cases, and

191
therefore it could have been seen as a way for the three banks to reduce some costs
through the use of intuition.

Concerning the uncertainty of decisions, managers should take steps to manage and
reduce risks. To do this, managers should use the tools of collecting and analyzing
information to enable them to understand the steps they need to take to ensure that
uncertainties are minimized. As this study shows, the most important steps for Banks to
take in this connection include self-analysis of information concerning the SD or
through consultancy firms, and / or taking ideas from the experience of other Arab
banks.

Pressure from Libyan Central Bank was identified as a serious problem in five strategic
decisions. Consequently, finding suitable and appropriate solutions reduce restrictions
imposed on the three banks should be available before starting the actual
implementation of any strategic decision. Managers have to make sure that the planning
process contains a careful administrative procedures situation within their banks before
decision making. Human resources and acceptable financial resources need to be
available beforehand in order to make effective strategic decisions.

Also, this study contributes an awareness that the three banks should demand the state
and the central bank to improve the laws, state policies and procedures that govern the
work of banks, and give the necessary freedom to banks in order to make decisions and
implement them in a timely manner without delay, giving banks the freedom to invest in
a variety of areas within the limits of applicable laws within the State.

Since SDs are very important to the future of a bank, managers should carefully collect
and analyse information to aid DM. The evidence shows that the use of power and
influence should be low to ensure that the most suitable decisions are taken in the
interest of their organization. When the use of power and influence is present, managers‘
DM may not follow the most rational approach, but rather reflect individual interest and
shared desires to flex political muscles, which could be very costly for the organization.
As interview results showed, since all the Banks made major investments into their SDs,
rational steps were taken to ensure that these investments were effective. Following this
careful approach reduced the risk level of decisions. In addition to the financial

192
implications, procedural rationality in the DMP was seen increasing as customers‘
satisfaction, employee welfare and social responsibility targets of the Banks.

Concerning the uncertainty of decisions, managers should take steps to manage and
reduce the risks. To do this, managers should use the tools of collecting and analyzing
information to enable them to understand the steps they need to take to ensure that
uncertainties are minimized. As this study shows, the most important steps for Banks to
take in this connection include self-analysis of information concerning the SD or
through consultancy firms, and / or taking ideas from the experience of other Arab
banks.

Also, this study suggests that managers must keep in mind how important the SD is to
the life of the organization. In that connection, the motives behind the SD should also be
pursued through a careful planning and implementation process. The results show that
commercial banks had taken those procedures ensure achievement of organizational
outcomes. In addition, managers working to a target must ensure that their planning and
implementation steps are carefully designed to adapt to environmental uncertainties of
their organizations: for example, preparing for future threats, and undertaking structural
changes that might be necessary to meet changes in the market.

Finally, another managerial contribution of this study relates to the approach of top
management. Evidence from this study show that all participants in the DMP were fully
aware of the SDs and the motivations behind them, as well as the importance to the
future of the banks, before the SDs were made. This finding in itself shows the
importance of getting all participants involved in the entire planning and
implementation process. As pinpointed in section 7.3, one key conclusion in this study
is that religion and culture influence the SDMP and strategic decision effectiveness. It is
important that managers take note of these two factors and the influence they may have
on the SDMP. Managers must effectively manage these dual factors, considering their
direct influence on strategic decision effectiveness.

193
7.6 Limitations of the Study

This study has provided a number of insights into the SDMP in the Libyan commercial
banking sector. While a number of contributions have emerged through this study, it
must be acknowledged that this study has a number of limitations. The first limitation of
this study is that it covered only Libyan commercial banks. Developing countries like
Libya have been largely ignored in the examination of SDM: most studies have focused
on the US and Europe. In addition to organizational culture (George and Jones, 2008;
Alavi et al., 2006), national culture (Hofstede et al., 2010) may influence how strategic
decisions are made in organizations, and market dynamics also differ from one country
to another. For these reasons, there is a need for caution in applying the findings from
this study to other national contexts.

In addition to the national context limitation pinpointed above, the fact that this study
only explored Libyan commercial banks is also a limitation that must be taken into
consideration when applying the findings from this study. Every industry has its main
features, and these features may influence the actions and steps that are necessary in the
SDMPs. So, the findings from this study may not necessary be applicable to other
industries, even in Libya. The factors influencing SDMP in other industries may be
different to commercial banking. Thus, caution must be taken when applying its
findings to other industrial contexts.

Interviewees were asked questions relating to their past experience of the SDMP. Thus
the facts presented in this study are dependent on the ability of the interviewees to
remember the facts of interest to the study. There is a possibility of errors in their
reports due to a failure to accurately report the facts. Or it is possible that the
interviewees did not reveal all true information, as a step to protect themselves or their
organizations. This possibility is another limitation of this study. As the sample involved
three banks and sixteen interviews, findings may not be representation of strategic
process. However, there was a considerable degree of agreement from the sixteen staff.

As well as the above mentioned issues, sometimes interviewees may have been giving
post-rationalized process information, as and sometimes they may have been trying to
impress; this is a possibility that should also be taken into consideration when
interpreting or applying the findings from this study.
194
Given the academic requirement for completing this PhD research within a specified
time, it was not possible to extend further the data collection duration. In addition, the
focus was only on collecting data from senior and middle managers within the three
banks. However, better insight into the DMP could have been obtained if other levels
within those banks had been involved in this research. Moreover, more cases and /or the
inclusion of more banks could have been helpful to increase the validity and the
robustness of the results of this research. Thus, this must be taken into consideration
when applying the findings from this thesis.

Another limitation of this study relates to the selection of the sample. All selected
decisions had very important consequences. Selecting less important decisions would
most likely have produced different results. This possibility limits the applicability of
the results from this study. It must also be noted that three banks were used as case
studies for this research. These may not be very representative of the banking industry,
and this also limits the extent to which the findings from this study can be interpreted to
represent evidence of the Libyan banking industry‘s SDMP.

The questions used to explore the SDMP were adapted from Elbanna (2003), which was
a quantitative survey. This methodological approach of adopting these questions may
not have been the best possible approach, and may have influenced the results from this
study. Qualitative methods were used to collect data in the present study. Chapter five
argued that these methods were the most appropriate for this kind of study because the
interviews were same-structured in order to uncover emergent aspects of the DMP.

Finally, the recent war in Libya, the change of government, and the political situation of
the state may have an impact on the strategies of the commercial banks and give greater
freedom to banks in terms of investment DM. So, future decisions will be conducted in
the light of new polices, which is likely to affect the results of the study, and which
should be taken into consideration when applying the findings from this study.

7.7 Future Research Directions

This study suggests a number of future research directions in an attempt to further

improve knowledge in the area of SDMP.

195
First, there is a lack of knowledge about SDMP in the developing country context.
More research in other industries in Libya is therefore necessary to understand which
factors of SDMP are involved. Future research should aim to explore the SDMP in
different industries, so that more comparative knowledge about the SDMP context can
be made available.

Also, since national culture seems to influence SDMP, it is necessary to conduct SDMP
studies in various countries with different cultures. Such studies will be challenging and
resource intensive from the data collection point of view. In this connection, future
research could compare two developing countries and also developed vs developing
countries. This will help flag clearly the culture related features of the SDMP, and more
importantly, how this might shape decision effectiveness. The role that religion plays
can also be explained in such studies.

This study has contributed to the understanding of the role of procedural rationality,
intuition and political behaviour in the SDMP. Can decision makers in the SDMP use
procedural rationality and at the same time use intuition and also show political
behaviour? If yes, what conditions would call for such actions, and why? This study has
shown that Libyan commercial bank use procedural rationality but not intuition or
political behaviour. In answering the above questions, future studies should also explain
the extent to which such decision actions would influence both organizational
performance and decision effectiveness.

This study identifies that the riskiness of a decision, and the extent to which decision
makers feel that much has been invested into the SD, influence the steps organizations
take in ensuring that the SD is well managed. It is also important for future studies to
explore the conditions that may determine the nature and extent of the steps decision
makers take to ensure the success of their SDs.

7.8 Personal Reflections

The study has taken four years to accomplish. The beginning of my research journey
and personal reflections contributed to an increased skill and knowledge of English
Language which was a great challenge for me, because my mother tongue is Arabic.
Language study increased my skills and abilities to overcome other difficulties. As

196
English was not part of the curriculum in Libya because Libyan government policy does
not allow it. Thus, I did not have the choice other than studying the language from the
beginning, and that for lasted one year. Then, I moved on to the main academic project
(PhD).

I have been vigorous and passionate in all stages of the research journey and was
inspired to examine the subject in depth through a qualitative approach. I conducted
interviews with senior managers of the Libyan commercial bank. Getting information
was not an easy task, particularly when the collecting of information could be seen as an
intimidation by some respondents. The use of individual interviewing to gather data was
well managed. This methodology allowed me to elucidate and request supplementary
questions at a level that improved the research outcomes with the respondents.

In the process, I, as the researcher have been on a journey that has had enormous
implications for me and my future. Coming to the UK and conducting this research has
changed me. I never would have predicted this when I started out on my research
journey to explore SDMP in Libyan commercial bank. Comparing who I was, with
now, the journey has provided me with many experiences which I have obtained from
various sources. I learned how to present my opinions constructively, how to discuss
problems in detail, how there is no right or wrong answer in social research or a best
method or methodological approach and how there is no limit to knowledge and
information.

Besides that, I have attended many student discussions of scientific research in various
subjects. Seminars and scientific conferences were also held within the University,
which provided the opportunity for students to exchange and discuss their views and
express their opinions. This allowed me to expand my scientific and personal skills. In
addition, I increased my scientific awareness and experience in conducting research
through meetings and discussions with my academic supervisors across four years,
which has enabled me to develop my subject and recognize that it was worthy of
consideration and study, at a sufficiently high level of scientific enquiry.

Other influences which have increased my skills and experience was part-time work in
Britain, my contact with people allowed me to learn a lot on the culture and daily

197
transactions in one of the best developed countries in the world, This allowed me to
benefit from many useful things in accordance with my beliefs and religion.

Finally, the war in Libya was a great dilemma for me and during that time I was in the
realm of study and work while my people were dying back at home. This had a negative
impact on my life and at the same time I was learning to be patient and to stand the
challenge of life. In addition, the situation taught me that life does not stop whatever the
difficulties I was facing.

I trust during this journey, I have been transformed with a new knowledge and
understanding in my chosen field. I have developed into a more positive, strong and
confident person. I am enthused to serve in the Libyan commercial bank as the
knowledge gained through this research study has given me opportunity to serve,
upkeep and improve the efficiency of strategic decisions in the future in the Libyan
commercial banking sector.

The research journey entailed both suffering and joy; however, in the end the researcher
was able to make a contribution to management literature, especially in the Arabic area,
and in Libya in particular. This enabled me to achieve my goal despite the difficulties,
and to increase scientific knowledge. My aim was to obtain a degree in Business
Administration in order to go back to my homeland and contribute to the service of my
country.

198
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214
Appendix (1) Letter of support from the Libyan Embassy for the collection of data
from Libyan Commercial Banks

215
Appendix (2)

Interview Questionnaire

Case No:
Interview No:
Date:
Interview‟s start time:
Finish time:

216
 University of Gloucestershire
Business School

PhD Research Title:

The process of strategic decisions making in Libyan Commercial
Banks

Dear Sir Manager

The researcher is undertaking a study which handles the process of strategic decision-
making (SDMP). The benefit she will gain from knowing your point views with regards
to the stages and process that go into decision-making inside Libyan banks, will impact
the long-term future and the performance of banks in general. Your beneficial points of
view and contributions will help the Researcher`s study, also the facts and accurate
details that you provides about the decision will have a significant impact on the quality
and accuracy of the research.
However, all the information in this questionnaire will be treated in confidence, and
honestly for the purposes of scientific research only, which will help me for my PhD
study in Business administration at Gloucestershire University in the United Kingdom.
You can also get a summary of the final result of the research if you write your address
at the end of the survey, which I also believe can serve, support and increase the
efficiency of making better strategic decisions in the future.

 Please note the survey with deal only with regards to Resolution No ()
 For any queries you can contact me on ( )

Please have all my thanks and appreciation in advance for your kind cooperation, and
ask God for your success.
The Researcher

217
General question

1-Please identify one recent strategic decision which has been taken in your
organization and you has a great of personal knowledge.

Section1.The degree of rationality

1. Did senior managers gather relevant information to make this decision? How.
2. Did senior managers analyse relevant information to make this decision? How.
3. There are some techniques which may be used by senior managers to get more
information to make a decision (e.g. attending training courses, conducting feasibility
studies and using consultants). Did the senior managers use such techniques in making
this decision? How.
4. How effective were the managers at focusing their attention on crucial information
while making this decision?

Section2. Intuition
1. Did senior managers use personal judgement? How.
3. Did previous experience of senior managers play a key role in making this decision?
How.

Section3. Political behaviour

1-Were the decision-makers open with each other about their interests and preferences
in this decision? Why and how.
2-Did decision-makers use their power in order to protect their interests and
preferences? Why and how.
3-Was the decision affected by negotiation among decision-makers? How.
4-Did decision-makers form alliances with each other in order to influence the decision?
How.
5- Did participants in this decision tend to hide or/and distort information to defend
their points of view? How.

218
Section4. Decision importance
1- Was this decision important to the organization? Why.
2- Did you anticipate that the decision would act as a basis for subsequent decisions?
How.
3-How serious would the consequences have been of delaying this decision?

Section5. Decision uncertainty

1- Was the kind of information needed to make this decision clear? If yes or no/ how.
2- Were senior managers uncertain about the actions that should be taken in order to
make this decision? If yes or no/ how.
3- Was it very difficult to predict the outcome of this decision? Why.
4-Was there variation in participants` points of view between formal meetings and
informal discussions? How.
5-In general, was the process of making this decision mostly intuitive or mostly
analytical?

Section6. Decision motive

1- Did you have adequate freedom in addressing this decision? How.
2- Was this decision related to an opportunity which could be exploited or a crisis which
had to be dealt with? How.
3-was the motivation for the organization in making this decision to avoid expected
negative effects on the organization or to improve an already secure situation? How.
4-How confident were the decision-makers that they were making the right choice?
How.
5- Were the goals of this decision clear to the participants? How.

Section7. Environmental hostility

1. How would you describe the external environment situation of the organization
during the making of this decision? e.g.:
a. Was very safe; little threat to survival and well-being of the company. How?
b. Was very risky; a false step can mean company‘s undoing. How?

219
 c. Was the decision rich in investment and marketing opportunities; not at all
stressful. How?
d. Was very stressful, exacting, hostile; Very hard to keep afloat. How?
e. was an environment that your company can control and manipulate to its own
advantage, (e, g, a dominant company in an industry with little competition and
few hindrances. How?
f. A dominating environment, in which your company‘s initiatives count for very
little against the tremendous forces of your business or political environment.
How?

Section8. Environmental uncertainty

1. Did you think the environment variables (production, economy, competition and
government policy) easy or difficult to predict during the making of this decision? If
easy or difficult to predict why do you think so?
2- was there many constraints in addressing this decision. How?

Section 9. Performance
1- how you can compare your organization with other similar organization s in size and
scope over the period of making this decision?

Section 10. Decision effectiveness

1- What were the objectives that the organization planned to accomplish with this
decision?

No. objectives

220
2- With respect to each of the objectives you have mentioned in the previous question,
has the company been successful in attaining them?
3- Were there any major negative or unexpected outcomes of this decision? How.
4- In retrospect, was this decision the right choice? How.
5- Did you expect the decision to change things in your company? How
6- How far ahead in the future did you initially expect the decision to significantly
influence the organization ? How.

Section 11.
1. Organization name
2. Position
3. Number of employees

Additional information:
1-If you wish to receive a copy of the final results of this, please determine your
correspondence address
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
2-Is there any additional comment you would like to add?
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
------

Thank you very much for your cooperation

221
‫)‪Appendix (3‬‬
‫)‪Interview Questionnaire (Arabic version‬‬

‫استمارة جمع المعلىماث‬

‫حالت رقم ‪..................................:‬‬

‫مقابلت رقم ‪.................................‬‬

‫التاريخ‪......................................‬‬

‫وقج البدء في المقابلت ‪......................‬‬

‫وقج إنهاء المقابلت ‪.........................‬‬

‫قسم االدارة ‪ :‬جامعت جلىسترشير (‪ )Questionnaire‬في بريطانيا‬

‫‪222‬‬
 ‫عبِؼخ عٍ‪ٛ‬عزششب‪٠‬ش وٍ‪١‬خ إداسح األػّبي دوز‪ٛ‬ساٖ‬

‫ػٕ‪ٛ‬اْ اٌجؾش‪ :‬ػٍّ‪١‬خ ارخبر اٌمشاساد االعزشار‪١‬غ‪١‬خ ف‪ ٟ‬اٌّظبسف اٌزغبس‪٠‬خ اٌٍ‪١‬ج‪١‬خ‬

‫ع‪١‬بدح اٌّذ‪٠‬ش اٌفبػً‬

‫اٌجبؽضخ رم‪ َٛ‬ثبعشاء دساعخ ؽ‪ٛ‬ي و‪١‬ف‪١‬خ ػٍّ‪١‬خ طٕغ اٌمشاساد االعزشار‪١‬غ‪١‬خ ‪ٚ‬اٌؼ‪ٛ‬اًِ اٌّؤصشٖ ػٍ‪ٔ ٝ‬غبؽ‪ٙ‬ب‪ .‬اٌفبئذح اٌز‪ ٝ‬ع‪ٛ‬ف‬
‫رغٕ‪ٙ١‬ب اٌجبؽضخ ِٓ ‪ٚ‬ع‪ٙ‬خ ٔظشن ف‪ّ١‬ب ‪٠‬زؼٍك ثّشاؽً ػٍّ‪١‬خ طٕغ اٌمشاساد االعزشار‪١‬غ‪١‬خ داخً اٌّظبسف اٌٍ‪١‬ج‪١‬خ‪ٚ ،‬ع‪ٛ‬ف رؤصش‬
‫ف‪ ٟ‬اٌّغزمجً ػٍ‪ ٝ‬اٌّذ‪ ٜ‬اٌط‪ ً٠ٛ‬ػٍ‪ ٝ‬أداء اٌجٕ‪ٛ‬ن ثشىً ػبَ‪ٚ .‬إٌمبؽ اٌّف‪١‬ذح ‪ٚ‬اٌّغبّ٘بد اٌز‪ ٝ‬رذٌ‪ ٝ‬ث‪ٙ‬ب ع‪ٛ‬ف رغبػذ اٌجبؽضخ‬
‫ف‪٘ ٝ‬زٖ اٌذساعخ‪ .‬أْ اٌ‪ٛ‬لبئغ ‪ٚ‬اٌزفبط‪ ً١‬اٌذل‪١‬مخ اٌز‪ ٟ‬رمذَ ثشؤْ اٌمشاس ع‪١‬ى‪ ٌٗ ْٛ‬رؤص‪١‬ش وج‪١‬ش ػٍ‪ ٝ‬ع‪ٛ‬دح ‪ٚ‬دلخ اٌجؾش‪ .‬وّب أْ‪،‬‬
‫ع‪١‬زُ ِؼبٍِخ عّ‪١‬غ اٌّؼٍ‪ِٛ‬بد اٌ‪ٛ‬اسدح ف‪٘ ٟ‬زا االعزج‪١‬بْ ف‪ ٟ‬عش‪٠‬خ ربِخ ‪ٚ ،‬ألغشاع اٌجؾش اٌؼٍّ‪ ٟ‬فمؾ‪ٚ ،‬اٌز‪ ٟ‬ع‪ٛ‬ف رغبػذ‬
‫اٌجبؽضخ ٌذساعخ اٌذوز‪ٛ‬ساٖ ف‪ ٟ‬إداسح األػّبي ف‪ ٟ‬عبِؼخ غٍ‪ٛ‬عزششب‪٠‬ش ف‪ ٟ‬اٌٍّّىخ اٌّزؾذح‪.‬‬

‫وّب ‪ّ٠‬ىٕه أ‪٠‬ؼب اٌؾظ‪ٛ‬ي ػٍ‪ٍِ ٝ‬خض ٌٍٕزبئظ ٘زح اٌذساعخ إرا وٕذ رشغت ف‪ ٝ‬رٌه ‪ ,‬أوزت ػٕ‪ٛ‬أه ف‪ٙٔ ٟ‬ب‪٠‬خ ٘زح اٌّمبثٍخ ‪،‬‬
‫ع‪١‬زؼّٓ ٘زا اٌٍّخض ثؼغ االلزشاؽبد اٌز‪ ِٓ ٝ‬اٌّّىٓ أْ رخذَ ‪ٚ‬رذػُ وفبءح ارخبر اٌمشاساد االعزشار‪١‬غ‪١‬خ ػٍ‪ٔ ٝ‬ؾ‪ٛ‬‬
‫أفؼً ف‪ ٟ‬اٌّغزمجً‪.‬‬

‫• ِٓ فؼٍه الؽع أْ اٌّمبثٍخ رخض لشاس اعزشار‪١‬غ‪ٚ ٝ‬اؽذ رُ ارخبدٖ ف‪ِ ٝ‬ظشفىُ ف‪ ٝ‬اخش عٕز‪ٓ١‬‬

‫• ٌٍؾظ‪ٛ‬ي ػٍ‪ ٝ‬أ‪ ٞ‬اعزفغبساد ‪ّ٠‬ىٕه االرظبي ث‪ ٟ‬ػٍ‪)0913974880 ( ٝ‬‬

‫شىشا عض‪٠‬ال ِمذِب ػٍ‪ ٝ‬ؽغٓ رؼب‪ٔٚ‬ىُ‪ٔٚ ،‬غؤي هللا ٌٕغبؽىُ‪.‬‬

‫اٌجبؽضخ‬

‫‪223‬‬
 ‫اٌغؤاي اٌؼبَ‬

‫‪ – 1‬اسع‪ٛ‬ا رؾذ‪٠‬ذ لشاسا ‪ٚ‬اؽذا اعزشار‪١‬غ‪١‬ب ارخزرٗ ِٕظّزىُ خالي عٕ‪ٛ‬اد عبثمخ ثؾ‪١‬ش ‪٠‬ى‪ٌ ْٛ‬ذ‪٠‬ىُ ِؼشفخ اٌشخظ‪١‬خ‬
‫ؽ‪ٛ‬ي ٘زا اٌمشاس‪.‬‬

‫اٌغضاء اال‪ٚ‬ي (‪ : )1‬دسعخ ِٓ اٌؼمالٔ‪١‬خ‬

‫‪ ً٘ .1‬رُ عّغ اٌّؼٍ‪ِٛ‬بد راد اٌظٍخ ِٓ لجً طٕبع اٌمشاس الرخبر ٘زا اٌمشاس؟ و‪١‬ف ‪.‬‬
‫‪ ً٘ .2‬لبَ طٕبع اٌمشاس ثزؾٍ‪ ً١‬اٌّؼٍ‪ِٛ‬بد راد اٌظٍخ الرخبر ٘زا اٌمشاس؟ و‪١‬ف ‪.‬‬
‫‪ٕ٘ .3‬بن ثؼغ اٌزمٕ‪١‬بد اٌز‪ّ٠ ٟ‬ىٓ اعزخذاِ‪ٙ‬ب ِٓ لجً طٕبع اٌمشاس ٌٍؾظ‪ٛ‬ي ػٍ‪ِ ٝ‬ض‪٠‬ذ ِٓ اٌّؼٍ‪ِٛ‬بد الرخبر لشاس‬
‫(ِضً ؽؼ‪ٛ‬س اٌذ‪ٚ‬ساد اٌزذس‪٠‬ج‪١‬خ ‪ٚ ،‬إعشاء دساعبد عذ‪ٚ ٜٚ‬اعزخذاَ اٌخجشاء االعزشبس‪ ً٘ .)ٓ١٠‬اػزّذ طٕبع‬
‫اٌمشاس ػٍ‪ِ ٝ‬ضً ٘زٖ اٌزمٕ‪١‬بد ف‪ ٟ‬طٕغ ٘زا اٌمشاس؟‬
‫‪ .4‬و‪١‬ف وبٔذ فؼبٌ‪١‬خ طٕبع اٌمشاس ف‪ ٟ‬رشو‪١‬ض ػٍ‪ ٝ‬اٌّؼٍ‪ِٛ‬بد اٌؾبعّخ ف‪ ٟ‬ارخبر ٘زا اٌمشاس؟ و‪١‬ف ‪.‬‬

‫اٌغضء اٌضبٔ‪ . ٟ‬ؽذط‬

‫‪ ً٘ .1‬اػزّذ طٕبع اٌمشاس ثظ‪ٛ‬سح اعبع‪١‬خ ػٍ‪ ٟ‬اٌؾىُ ‪ٚ‬اٌزمذ‪٠‬ش اٌشخظ‪ ٟ‬ف‪ ٟ‬ػٍّ‪١‬خ طٕغ ٘زا اٌمشاس ؟ و‪١‬ف ‪.‬‬
‫‪ٌ ً٘ .3‬ؼجذ اٌخجشح اٌغبثمخ ٌٍّذ‪٠‬ش‪ ٓ٠‬د‪ٚ‬سا سئ‪١‬غ‪١‬ب ف‪ ٟ‬طٕغ ٘زا اٌمشاس ؟ و‪١‬ف ‪.‬‬

‫اٌغضء اٌضبٌش‪ .‬اٌغٍ‪ٛ‬ن اٌغ‪١‬بع‪ٟ‬‬

‫‪ ً٘ 1‬وبْ ٕ٘بن ‪ٚ‬ػ‪ٛ‬ػ ‪ٚ‬شفبف‪١‬خ ث‪ ٓ١‬طٕبع اٌمشاس ثخظ‪ٛ‬ص ِظبٌؾ‪ٚ ُٙ‬األفؼٍ‪١‬بد اٌّشرجطخ ثبٌمشاس؟ ٌّبرا‬
‫‪ٚ‬و‪١‬ف‪.‬‬
‫‪ ً٘ -2‬رؤصش ٘زا اٌمشاس ثؼٍّ‪١‬بد اٌّغب‪ ِٗٚ‬ث‪ ٓ١‬طبٔغ اٌمشاس ؟ ٌّبرا ‪ٚ‬و‪١‬ف‪.‬‬
‫‪ ً٘ - 3‬شىً طٕبع اٌمشاس اٌزؾبٌفبد ِغ ثؼؼ‪ٙ‬ب اٌجؼغ ِٓ أعً فشع ‪ٚ‬ع‪ٙ‬بد ٔظشُ٘ ؟ ٌّبرا ‪ٚ‬و‪١‬ف‪.‬‬
‫‪ ً٘ -4‬اعزخذَ طٕبع اٌمشاس ل‪ٛ‬ار‪ٔٚ ُٙ‬ف‪ٛ‬دُ٘ ِٓ أعً ؽّب‪٠‬خ ِظبٌؾ‪ٚ ُٙ‬رفؼ‪١‬الر‪ ُٙ‬؟ و‪١‬ف‪.‬‬
‫‪ ً٘ -5‬وبْ اٌّشبسو‪ ٓ١‬ف‪٘ ٟ‬زا اٌمشاس ‪ ٍْٛ١ّ٠‬إٌ‪ ٝ‬إخفبء أ‪ٚ / ٚ‬رش‪ ٗ٠ٛ‬اٌّؼٍ‪ِٛ‬بد ٌٍذفبع ػٓ ‪ٚ‬ع‪ٙ‬بد ٔظشُ٘ ؟ و‪١‬ف‪.‬‬

‫اٌغضء اٌشاثغ‪ .‬أّ٘‪١‬خ اٌمشاس‬

‫‪224‬‬
 ‫‪ ً٘ - 1‬وبْ ٘زا اٌمشاس ِ‪ٌٍّٕ ُٙ‬ظّزىُ؟ ٌّبرا‪.‬‬
‫‪ ً٘ - 2‬وٕذ أر‪ٛ‬لغ أْ ٘زا اٌمشاس ع‪ٛ‬ف ‪٠‬ى‪ ْٛ‬ثّضبثخ أعبط الرخبر لشاساد الؽمخ؟ و‪١‬ف‪.‬‬
‫‪ٕ٘ ً٘ -3‬بن أ‪ ٞ‬خط‪ٛ‬سح ف‪ ٟ‬إٌزبئظ ارا ؽذس أ‪ ٞ‬رؤخ‪١‬ش ٘زا اٌمشاس؟‬

‫اٌغضء اٌخبِظ‪ .‬لشاس ػذَ اٌ‪١‬م‪ٓ١‬‬

‫‪٠ ٌُ -- 1‬ىٓ ِٓ اٌ‪ٛ‬اػؼ ػٍ‪ ٝ‬اإلؽالق ٔ‪ٛ‬ع اٌّؼٍ‪ِٛ‬بد اٌز‪٠ ٟ‬غت عّؼ‪ٙ‬ب الرخبر ٘زا اٌمشاس؟ ارا ٔؼُ ‪ /‬ا‪ ٚ‬ال و‪١‬ف‪.‬‬

‫‪ – 2‬طٕبع اٌمشاسوبٔ‪ٛ‬ا غ‪١‬ش ِزؤوذ‪ ِٓ ٓ٠‬اإلعشاءاد اٌز‪ٕ٠ ٟ‬جغ‪ ٟ‬ارخبر٘ب ِٓ أعً طٕغ ٘زا اٌمشاس؟ ارا ٔؼُ أ‪ ٚ‬ال ‪/‬‬
‫و‪١‬ف‪.‬‬

‫‪ ً٘ – 3‬وبْ ِٓ اٌظؼت عذا اٌزٕجؤ ثٕز‪١‬غخ ٘زا اٌمشاس؟ ارا ٔؼُ أ‪ ٚ‬ال ‪ /‬و‪١‬ف ‪.‬‬

‫‪ ً٘ - 4‬وبْ ٕ٘بن رجب‪ ٓ٠‬ا‪ ٚ‬اخزالف ف‪ٚ ٟ‬ع‪ٙ‬بد ٔظش اٌّشبسو‪ ٓ١‬ف‪ ٟ‬طٕغ ٘زا اٌمشاس ف‪ ٟ‬االعزّبػبد اٌشعّ‪١‬خ‬
‫‪ٚ‬إٌّبلشبد غ‪١‬ش اٌشعّ‪١‬خ ؟ إرا ٔؼُ ‪ ،‬و‪١‬ف ؟‬

‫‪ - 5‬ثظفخ ػبِخ ‪ ً٘ ،‬وبٔذ ػٍّ‪١‬خ طٕغ ٘زا اٌمشاس ِؼزّذح ػٍ‪ ٟ‬اٌذساعخ ‪ٚ‬اٌزؾٍ‪ ً١‬أَ ِؼزّذح ػٍ‪ ٟ‬اٌؾىُ اٌشخظ‪ٟ‬‬
‫؟ و‪١‬ف ‪.‬‬

‫اٌغضء اٌغبدط ‪ :‬ؽ‪ٛ‬افض اٌمشاس‬

‫ً٘ ‪ ً٘ – 1‬وبْ ٌذ‪٠‬ىُ اٌؾش‪٠‬خ اٌىبف‪١‬خ ف‪ ٟ‬رٕب‪ٚ‬ي ‪ٚ‬دساعخ ٘زا اٌمشاس؟؟ ‪ /‬و‪١‬ف ؟‬
‫‪ ً٘ -2‬وبْ ٘زا اٌمشاس فشطخ ‪ٕ٠‬جغ‪ ٟ‬اعزغالٌ‪ٙ‬ب أ‪ ٚ‬أصِخ اٌز‪ ٟ‬وبْ ال ثذ ِٓ اٌزؼبًِ ِؼ‪ٙ‬ب؟ و‪١‬ف؟‬
‫‪ ً٘ -3‬وبْ اٌذافغ ِٓ طٕغ ٘زا اٌمشاس ٌزفبد‪ ٞ‬ا‪٢‬صبس اٌغٍج‪١‬خ اٌّز‪ٛ‬لؼخ ػٍ‪ ٝ‬إٌّظّخ أ‪ٌ ٚ‬زؾغ‪ٚ ٓ١‬ػغ إٌّظّخ؟‬
‫و‪١‬ف؟‬
‫‪ ً٘ -4‬وبْ طٕبع اٌمشاس ‪ٚ‬اصم‪ ِٓ ٓ١‬طؾخ ٘زا اٌمشاس؟ و‪١‬ف ‪.‬‬
‫‪ ً٘ -5‬وبٔذ أ٘ذاف ٘زا اٌمشاس ‪ٚ‬اػؾخ ٌٍّشبسو‪ ٓ١‬ف‪ ٟ‬ػٍّ‪١‬خ طٕؼٗ؟ و‪١‬ف‪.‬‬

‫اٌغضء اٌغبثغ ‪ .‬اٌج‪١‬ئخ اٌّؼبد‪٠‬خ‬

‫‪ .1‬و‪١‬ف رظف‪ ْٛ‬اٌ‪ٛ‬ػغ اٌج‪١‬ئخ اٌخبسع‪١‬خ ٌٍّٕظّخ خالي ارخبر ٘زا اٌمشاس؟ ػٍ‪ ٝ‬عج‪ ً١‬اٌّضبي ‪:‬‬
‫أ‪ .‬وبٔذ ث‪١‬ئخ إِٓخ عذا ؛ ر‪ٙ‬ذ‪٠‬ذ ِؾذ‪ٚ‬د ٌٍجمبء إٌّظّخ ‪ٚ ,‬إٌّظّخ رزّزغ ث‪ٛ‬ػغ ل‪ .ٞٛ‬إرا وبْ اٌغ‪ٛ‬اة ٔؼُ ‪ /‬و‪١‬ف‪.‬‬
‫ة‪ .‬وبٔذ ث‪١‬ئخ خط‪١‬شح عذا أ‪ ٚ‬اٌزؾشن اٌخبؽ‪ ٝ‬لذ ‪ٛ٠‬د‪ ٞ‬اٌ‪ ٟ‬اٌخش‪ٚ‬ط ِٓ اٌغ‪ٛ‬ق ‪ .‬و‪١‬ف‪.‬‬
‫ط‪ٚ .‬فشٖ ف‪ ٟ‬فشص االعزضّبس ‪ٚ‬اٌزغ‪٠ٛ‬ك‪ ,‬الر‪ٛ‬عذ أ‪ ٞ‬ػغ‪ٛ‬ؽ إرا وبْ اٌغ‪ٛ‬اة ٔؼُ ‪ /‬و‪١‬ف‪.‬‬
‫د‪ .‬أ‪ ٚ‬ػغ‪ٛ‬ؽ شذ‪٠‬ذ ‪ ,‬ث‪١‬ئخ ػذئ‪١‬خ ‪،‬طؼ‪ٛ‬ثخ ف‪ ٟ‬االعزّشاس ف‪ ٟ‬اٌؼًّ ‪ .‬و‪١‬ف‪.‬‬
‫ٖ‪ّ٠ .‬ىٓ ٌٍّٕظّخ اْ رزؾىُ ف‪ ٟ‬اٌظش‪ٚ‬ف اٌج‪١‬ئ‪١‬خ اٌّؾ‪١‬طخ ؽجمآ ٌّظبٌؾ‪ٙ‬ب اٌخبطخ (ِضً ‪ِٕ :‬ظّخ ِغ‪١‬طشح ػٍ‪ٟ‬‬
‫اٌظٕبػخ‪ ,‬ر‪ٛ‬اعٗ ِٕبفغخ ػؼ‪١‬فخ ‪ٚ‬ػ‪ٛ‬ائك ِؾذ‪ٚ‬دٖ)‪ .‬و‪١‬ف‪.‬‬
‫‪225‬‬
 ‫‪ .ٚ‬اٌج‪١‬ئخ ِغ‪١‬طشح ‪ ,‬ؽ‪١‬ش أْ لذسح اٌششوخ ػٍ‪ ٟ‬اٌغ‪١‬طشح ‪ٚ‬اٌّجبدسح ِؾذ‪ٚ‬دٖ عذا ِمبسٔخ ثبٌذ‪ٚ‬س اٌ‪ٙ‬بَ اٌز‪ ٞ‬رٍؼجٗ وً‬
‫ِٓ ث‪١‬ئخ االػّبي ‪ٚ‬اٌظش‪ٚ‬ف اٌغ‪١‬بع‪١‬خ‪ .‬و‪١‬ف‪.‬‬

‫اٌغضء اٌضبِٓ ‪ :‬ػذَ اٌز‪١‬مٓ اٌج‪١‬ئئ‬

‫‪ ً٘ .1‬رؼزمذ أْ ِزغ‪١‬شاد اٌج‪١‬ئخ (اإلٔزبط ‪ٚ ،‬االلزظبد ‪ٚ ،‬إٌّبفغخ ‪ٚ‬ع‪١‬بعخ اٌؾى‪ِٛ‬خ) ِٓ اٌغ‪ ًٙ‬أ‪ ٚ‬اٌظؼت اٌزٕجؤ ث‪ٙ‬ب‬
‫أصٕبء طٕغ ٘زا اٌمشاس؟ إرا وبْ ِٓ اٌغ‪ ًٙ‬أ‪ ٚ‬اٌظؼت اٌزٕجؤ و‪١‬ف‪.‬‬
‫‪ ً٘ - 2‬وبْ ٕ٘بن اٌىض‪١‬ش ِٓ اٌم‪ٛ١‬د ف‪ ٟ‬رٕب‪ٚ‬ي ‪ٚ‬دساعخ ٘زا اٌمشاس‪ .‬و‪١‬ف ‪.‬‬

‫اٌغضء اٌزبعغ‪ :‬أداء إٌّظّبد‬

‫‪ 1‬و‪١‬ف ‪ّ٠‬ىٕه ِمبسٔخ ِٕظّبرىُ ِغ ِٕظّبد أخش‪ِّ ٜ‬بصٍخ ف‪ ٟ‬اٌؾغُ ‪ٚ‬إٌطبق خالي فزشح طٕغ ٘زا اٌمشاس؟‬

‫اٌغضء اٌؼبشش‪ .‬فؼبٌ‪١‬خ اٌمشاس‬

‫‪ِ -1‬ب ٘‪ ٟ‬األ٘ذاف اٌز‪ ٟ‬خططذ إٌّظّخ اْ رؾمم‪ٙ‬ب ِغ ٘زا اٌمشاس؟‬

‫األ٘ذاف‬ ‫اٌؼذد‬

‫‪ - 2‬ف‪ِ ٟ‬ب ‪٠‬زؼٍك ثىً ِٓ األ٘ذاف اٌز‪ ٟ‬روشر‪ٙ‬ب ف‪ ٟ‬اٌغؤاي اٌغبثك ‪ٔ ً٘ ،‬غؾذ إٌّظّخ ف‪ ٟ‬رؾم‪١‬ك وً ٘زف؟‬
‫و‪١‬ف ‪.‬‬
‫‪ ً٘ -3‬وبْ ٕ٘بن أ‪ٔ ٞ‬زبئظ عٍج‪١‬خ وج‪١‬شح غ‪١‬ش ِز‪ٛ‬لؼخ ِٓ ٘زا اٌمشاس؟ و‪١‬ف‪.‬‬
‫‪ -- 4‬ؽجمب ٌ‪ٛ‬ع‪ٙ‬خ ٔظشن األْ ‪ ً٘ ،‬وبْ ٘زا اٌمشاس ‪ّ٠‬ضً االخز‪١‬بس اٌظؾ‪١‬ؼ ؟ و‪١‬ف‪.‬‬
‫‪ ً٘ -5‬وٕذ رز‪ٛ‬لغ أْ ‪٠‬غ‪١‬ش ٘زا اٌمشاس ِٓ اال‪ٚ‬ػبع ف‪ِٕ ٟ‬ظّبرىُ؟ و‪١‬ف‪.‬‬
‫‪ – 6‬اٌ‪ ٟ‬ا‪ِ ٞ‬ذ‪ ٞ‬ف‪ ٟ‬اٌّغزمجً رز‪ٛ‬لغ أْ ‪٠‬ؤصش ٘زا اٌمشاس ثظ‪ٛ‬سح اعبع‪١‬خ ػٍ‪ ٟ‬إٌّظّخ وىً؟ عٕخ ا‪ ٚ‬عٕز‪ ٓ١‬اٌخ ‪/‬‬
‫و‪١‬ف؟‬

‫‪226‬‬
 ‫اٌغضء اٌؾبد‪ ٞ‬ػشش‪ .‬ؽغُ إٌّظّخ‬
‫‪ .1‬اعُ إٌّظّخ ‪............................‬‬
‫‪ .2‬اٌّ‪ٛ‬لغ‪.................................‬‬
‫‪ .3‬ػذد اٌّ‪ٛ‬ظف‪............................ٓ١‬‬
‫اٌغضء اٌزبٔ‪ ٟ‬ػشش ‪ِ :‬ؼٍ‪ِٛ‬بد شخظ‪١‬خ‬
‫اٌّؤً٘ اٌؼٍّ‪............................................ ٟ‬‬ ‫اٌؼّش ‪...................... :‬‬
‫إٌّظت االداس‪ ٞ‬اٌز‪ ٞ‬رشغٍ‪ ٗٔٛ‬ؽبٌ‪١‬ب‪...............................................................‬‬
‫ػذد اٌغٕ‪ٛ‬اد اٌز‪ ٟ‬شغٍذ ف‪ٙ١‬ب ِٕظت ِذ‪٠‬ش اداسح ‪.................................................‬‬
‫ػذد اٌغٕ‪ٛ‬اد اٌز‪ ٟ‬أِؼ‪١‬ز‪ٙ‬ب ف‪ ٟ‬اٌؼًّ ثّٕظّزىُ ‪..................................................‬‬

‫ِض‪٠‬ذ ِٓ اٌّؼٍ‪ِٛ‬بد ‪:‬‬

‫ارا وٕذ رشغت ف‪ ٟ‬اٌؾظ‪ٛ‬ي ػٍ‪ٔ ٝ‬غخخ ِٓ إٌزبئظ إٌ‪ٙ‬بئ‪١‬خ ٌ‪ٙ‬زٖ اٌذساعخ‪ ِٓ ,‬فؼٍه ؽذد اٌؼٕ‪ٛ‬اْ‬ ‫‪-1‬‬
‫اٌز‪ ٞ‬رشغت ف‪ ٟ‬اسعبي إٌزبئظ ػٍ‪............................................................................ٗ١‬‬

‫ً٘ ٕ٘بن ا‪ ٞ‬رؼٍ‪١‬ك رشغت ف‪ ٟ‬اػبفزٗ‪........................................................................‬‬ ‫‪-2‬‬

‫شىشاً عض‪٠‬الً ٌؾغٓ ٌزؼب‪ٔٚ‬ىُ‬

‫‪227‬‬
Appendix (4):
Transcription of translated (English) interview

Interview Guide No (1) at the Bank A and which was concerning the decision for
new technology system.

Case No 1 Interview No. 1 Date 12/6/2010,

Name of Organization Bank A

Position: Tripoli
Number of employees: 58000
The start time of an interview (1): 10 . Finish time: 11:30

The decision for new technology system

At the start we asked the participant about a strategic decision recently taken by the
bank, which they had knowledge off. With regards to this P1 tried to explain the
decision and expressed the following:

According to the P1 new technology system decision is the most important strategic
decisions, which had taken in the bank. Regarding this matter P1 said

“… the bank had prepared a thorough plan to study the programme on 4th September
2004 with the help of The Central Bank of Libya and the Commercial Banks and
consultation companies..... Our bank and these banks formed a committee from all
participating banks their aim was to study all aspects of the programme and methods
needed to work it.”

According to P1 stated that the scheme is made up of the following sections

1. the immediate general settlement system, which aims to balance bank accounts
between the commercial banks a nd central bank of Libya by an instant and
immediate method.
2. The second system is called electronic clearing. This has the task of clearing
transaction and transfers, payments and commitments that happen between the
banks and participating sectors of the system.

228
 3. The third factor is electronic clearing of cheques. If this is implemented it is
predicted to solve many problems and delays caused by geographic and postal
reasons linked with cheque clearing
4. The fourth section is regarding establishing cash machines (ATMs). The banks
will work together to set up ATMs in shops and public places.
5. The fifth section is a communications network. This section has been given a
protection programme, because it deals with money. This has been agreed by
the world‘s important companies specialising in this field.

The first part: The degree of rationality

In the first part of the questions, it focuses on obtaining views on the extent to which
the method of rational strategic decision-making, by relying on the collection of the
necessary information and analysing it, and reliance on some methods to get more
precise information, the extent of success in focusing on critical information that
contribute to making this decision.

In this regard, P1 agreed that the actual compilation of data and information was
extensively about this decision. And all aspects of the problem were examined. The
main problem occurs Inefficient banking core systems, the bank was depend on
programmed locally systems and limited efficiency and non-threaded, prepared
technology is relatively sophisticated, which contributed to the limited operations which
provide, unhappy that for a long time, the weak capacity of control and control of these
operations. This problem resulted as follows: when both the people and the bank has to
spend long period of time to conduct withdrawal and deposit. Besides, people do not
easily get access to their bank details, for example, the account balance or the account
movement. It is also difficult to open a current account with a commercial bank, where
more time or inside contact is needed. The non-friendly environment and unpleasant
attitudes of staffs has discouraged customers to request the service.

Due to this matter, they believe that it is extremely important to improve the standard of
banking services, imposing the circumstances of the stage and economic development,
the decision was made in order to overcome these problems.

229
As a result, participant agreed that the collected information relies on all the possible
sources internally or externally. They have been composition of internal committees to
study what are the capabilities available in the bank, and to prepare a preliminary report
for the project which includes the estimated costs and the duration of time required in its
implementation, also, to prepare comprehensive study of Communications and
Information Technology (Computer). Moreover, in collecting the data and identifying
the needs of the project they then visited the General Post and Telecommunications
Company (GPTC) and other related bodies.

Hence, the bank was suffering from very poor efficiency technology for example; the
computers have no appropriate system in processing information and modern
communication means. Even though the bank has qualified personnel in computer
technology, however they did not exploits this competencies.

Besides, P1 agreed that they are depending on the external sources to gather the
information‘s. This can be achieved by having frequent visit to the Arab States
(Alardan, Egypt), as to identify the better methods implemented as they are using the
same technology. In addition, as they are relying on consulting firms and foreign
specialists, a contract was made with the company ‗McKinsey for six months. The
company then conducted a study to investigate the current problems which the bank is
suffering; this includes all level of organisation in the bank. Then, appropriate solutions
to the problems were proposed, which also cost a large amount of money. There was a
training course organised for the selected Executives and team members on operating
the system so that they can be relied upon in the future. And he said that “I think that
the most important information we have collected was about any of the companies that
have strong system technologies and they are difficult to introduce”.

P1 stated that the bank have assigned 40 staffs from various departments who were
selected based on certain criteria and standard (working experiences, academic
qualifications, and age) to go for training. This is for them to have better knowledge and
skills in using the technology system; also they get to know the pros and cons of the
system and will be introduced to the project manager afterwards.

P1 agreed that the most important problem is that, lack of information and insufficient
time to collect the data and information. The reasons to these problems are probably due
230
to lack of staffs with competencies in information circulation, staffs are lack of training,
dispersion of required data in many administration. Hence, both participants argued
that, in order to overcome the problem, necessary training for employees to run the
system and also to develop their competency in work. As discussed earlier, it will
however cost the bank a lot of money.

Another difficulty stated by P1 is the weakness of the communications network, which

is said as one of the most important thing in the decision making. They then found the
solution to this particular problem as they get contact with the (GPTC) to support the
infrastructure of their communications network.

P1also stated that delay in the decision making is another problem that the top
management is facing. The postponement speed of decision-making, this is because the
bank is under the Central Bank of Libya‘s control and so, any decision cannot be made
without referring to the Central Bank of Libya, and this will somehow give negative
impacts on the performance of the bank.

Particularly, P1 assured that they had been relying on the analysis of information
.However, when asked about how to analyse the data the answers given by him was not
that satisfying. P1 argued that, all data is gathered, sometimes through working, as a
result of communication and report writings and for some other reasons, either we
know, or we do not know all the procedures and operations. The problem relies on the
fact that we do not have the systems to analyze all these data or to convert it into
information that can be used later

Moreover, he then added that, the presence of the consulting firm in the formal meetings
held between the Chairman of Board Directors, members of Management Committee
and Executive Director of the project is to discuss the reports and information gathered
which was introduced by the Committee of the project. They then have the opportunity
to expose the problems, discuss it, and find out the appropriate solution to the problems.
Thus, with assistance from the Central Bank of Libya and based they successfully
collected and analysed the information. The company (Mackenzie) is believed to be the
optimal alternative and the most suitable company for the Implementation of the
project. The features of the global advantage of the company are distinguished, for
example the power of technology in the protection system which seems difficult to
231
penetrate. Additionally, this company certified as the most important international firms
who specialized in this area.

In spite of the lack of database information for processing information by computers

and modern means of communication, in the meantime the bank has the financial and
human resource which if it is exploited it would be able to dispense by using the
external foreign expertise of . In this vein, P1 then stated that they have skilful
members, still they did not rely on them too much in collecting information and
analysing it, this can be said due to the lack of information database, which has caused
us to depend on external expertise, this however cost us a lot of money and more time
required. In this context, P1 stated that ―For my bank, it was important that we analyse
relevant information. To be able to do that, we used the Engineering Consulting
Bureau”

In addition P1 stated that they managed to access crucial information which succeed
them in making this decision, despite of the problems and difficulties they faced in
making this decision. In this vein P1 stated that

―we did a test on the technology system in order to make sure about the results of the
decision made. It was a 100 percent success in this test which helped us to ensure the
results of the decisions and the speed in making this decision and its application”

The second part: Intuition

Intuition refers to the type of knowledge which uses not logic and competence. Intuition
is a form of knowledge is not necessary to explain in words, often comes lightning and
sudden manner.

In the first part of the questions, it focuses on obtaining views on the extent to which
use the intuition in making of the strategic decision by relying on the personal
judgement, previous experience of managers.

In this regard, when we asked question about intuition, the participant did not
understand the meaning of intuition and what is it, I explained to him the meaning of
intuition and give to him some examples to let the participant to understanding the
meaning of intuition.

232
P1 disagreed that, the using of intuition in strategic decision-making within the Bank.
P1 stated that the decision new technology system was based mainly on scientific
method to gather information and necessary data and analysis. By relying on consultants
that were using in collected the information and study this decision. In this vein P1
stated that

“... this decision concerns particularly the banking sector and generally the State,
therefore the process of intuition is excluded in this decision, and any mistake in making
this decision will bring a significant risk, thus the influence on the Bank's performance
will be negative”. (P1-A)

Also P1agreed that they faced the problem of lack of some information, for example
no exclusively, identifying the project are needs within the bank organizationally, who
is responsible for operating the technical systems, this is a big responsibility, Also, the
culture and people's awareness and understanding of the importance of this technology.
All these problems cannot solve by relying on intuition, because they need accurate
information and members have the technicians and skills to overcome on these
difficulties.

P1 agreed that previous experience of the top manager has had an important role in
making this decision; also, he reported that the personal experience of top manager
involved in making this decision, addition to external expertise contracted which was
effective contribution in increasing the ability to put ideas and new proposals. Also
previous experience grant top manager the ability of Knowledge for all various
positions, and suggesting the appropriate solutions of special problems occurred of a
new system technology, and the optimise customization human recourses and financial
to project finance.

In this vein p1 stated that, “...Of course, experience is an important element in any
decision', Thus, all members of the Board of Directors had long experiences and
qualifications in the field of banking, this experience permits all members to
manage one of the biggest consultation centres. But they lacked experience in making
this decision” (P1-A)

Besides, he reported that they had selected the executive and teams member mainly
based on their past experience and qualifications, as well as subjecting them to get

233
internal courses training and external to increase their efficiency and productive at
work. Also he reported that the bank administration did not care before by national
qualifications, or the seeking to raise their efficiency ,and this led to negative effect on
morale staff and less productivity at work.

The third part: Political behaviour

The political approach depends on the system being made up of a number of directions
that do not always have the same aims. Each associate wishes to improve their ideas in
developing the organisation. This approach poses the economical theory which
considers an organisation being one economical unit, therefore there would only be one
person representing the organisation as a whole. As well as that, this approach
considers decision making as the merging and combining of different groups within the
organisation towards a union, even if it means temporary between the decision makers.
This is all for the interest of making a generally fair decision.

The first part of the question focuses on gathering points of views about the affect
political behaviour on the process of strategic decision-making. This takes into
consideration the transparency and clarity of decision makers their preferences and
interests with respect to this decision. It also accounts for how the decision makers use
their power to defend their interests and preferences, bargaining between decision
makers, making alliances between decision-makers, their interest for their own personal
aims and hiding or distorting any information among decision makers.

P1 said that there is transparency amongst decision makers for the interest and
preferences of the bank. They highlighted that when making this decision they had to
relate to the core on the basis of ethics, values and highest moral transparency. The
philosophy adapted by the bank is to abide to those ethics. In addition to this all the
meetings and discussions held between the General Manager and Management
Committee members all had the same aims and had the interest of the republic bank and
all other Libyan banks at the highest level. They aim to develop better services for its
costumers, reduce cost and improve performance for the bank. With regards to this issue
P1 said

234
"there is no transparency amongst mangers concerning their interests and preferences.
And when we make this decision we had to relate to the core of ethics, values and
highest moral transparency....in my opinion, in all the meetings and discussions, there
were cooperation between us and we had the same aims and had the interest of the bank
at heart”.

In the same context, I asked the participant if there are any bargaining processes
between the decision-makers in making this decision. In this regard, P1 agree that there
was no any bargaining between the decision-makers in any form of political satisfaction
because this decision was a higher decision, which aims towards the general interest of
the bank. This has no place for equality.

In addition, P1 agree that the decision-makers used their power and influence to protect
the interest of the bank. This goes back to the fact that this decision was political from
the state‘s upper management and participating in the project was compulsory according
to the organisations that have accounts with the central bank of Libya especially
commercial banks.

Therefore the General Manager and Management Committee members used its power
and interest to adopt the project. The bank will face consequences if it does not develop
their main banking systems. This means that, the General Manager and Management
Committee members had to be strict in its decisions regarding banks so it can achieve
the highest aims for the projects during a certain time line. However, enforcing these
powers and influences have more positives than negatives, hence this decision has many
advantages that is reflected on the bank.

They also added that there is controversy and differences in the points of views amongst
the decision makers regarding the complicated routine of management plus large
number of approvals and the difficulty of its procedures that have been imposed by
central bank of Libya. This means it‘s important to refer back to commercial banks in
any procedure taken by the bank whilst taking this decision. This had a negative effect
on how quick a decision was made and providing a service to customers. There were
also costly expenses that the bank spent when dealing with the McKenzie Company,
which was not necessary since there were qualified individuals that could have been
reliable. However, they did not have to be trained to gain more experience. He also
added that there had been a disagreement in points of views between the banks

235
management and members of the management committee in relation to the financial
gain to team members in the form of bonuses. Also, the hours of work for overtime,
where we can find some are aiming towards their personal interest to make good use of
this decision.

The fourth section: Decision importance

The participant agreed that this decision was very important for the bank. Therefore,
introducing this advanced technology will result in a noticeable difference in the ways
and methods of the bank‘s activities and build an organised structure. This change has
reflected the flexibility of the bank, not only in facing circumstances and demands of
the national money market but also in expanding the international activities.

Also he added that “the staffs of this bank know the importance of using this technology
and the overall strategic decision. We all know that the decision is for the general
interest of the bank, so there is no point to show political behaviour in bargaining.‖

The participant added that due to the importance of this decision, enough supplies and
experienced personnel have been assigned to make the decision. They took enough
time for research and discussions to study all aspects of the project, taking into account
all the positives and negatives that may occur from this decision so there was no
pressure in making the decision.

―The staffs of this bank know the importance of using this technology and the overall
strategic decision. We all know that the decision is for the general interest of the bank,
so there is no point to show political behaviour in bargaining.‖

In addition, P1 added that the problem that faced them, which caused a shortage of
time, was postponing and delaying administrative procedures because they had to be
passed through different paths within the bank. The second reason is that some
organisational procedures forced us to return and gain acceptance from commercial
banks.

Due to the importance of this decision, P1 agreed that there are other decisions to follow
this one with same importance. They are also considered to complement this decision
and will contribute in developing the services of the bank, about this P1 said “The Bank
236
invested much time and resources to this decision to make it work. Training courses
were introduced and a new department created.”

P1 agreed that risks can occur if mistakes happen, but he do not think this will happen
as long as the decision is built on strong, technical and practical theories. This is
because it was given plenty of time and interest and also given qualified individuals that
were able to collect information and analyse and rate the problems. In addition to this
P1 added that the greatest risk that the decision can face is that new and quality
information about working environment and ability cannot be provided, where
information is considered a basic boost for decision making. As long as information is
provided we predict that there are no dangers for the decision‘s results. The only danger
that the bank may face, which has a negative impact on the results, is not enough correct
and affective training is given to employees of the project.

The fifth section: the uncertainty of the decision

If the possibilities of alternative results are unknown or unpredictable, the managers

would have to take a decision if the circumstances are unconfirmed or uncertain. One
of the main reasons of uncertainty is unavailability to information and also, unclear or
incredible information. Even if it was available it is not enough to produce a certain
situation.

P1 confirmed that the required information collected was clear about this decision. The
good information they collected can help them make early predictions on future results
to the decision.

He added that they had enough required information and clear information to make this
decision. For example, they had full knowledge of cost, time; ability needed and
required human power for the project. Also, full information about the markets‘
environment and similar or rival associations was collected. They also had knowledge
of laws and regulations that the state worked by and which ruled the banks. In addition,
the political environment of the country was safe for the bank.

“In our formal meeting we identified the required information to be gathered

concerning this decision....We had full knowledge of cost, time; ability needed and

237
required human power for the project, and the implementation Company for the
national payments decision” (P1-A)

He also confirmed that managers were fully aware of the procedures to take to make the
decision. P1 said that at the beginning information about the procedures to make this
decision was really unclear but some meetings and negotiations with associated
companies‘ things were clearer, we followed the risks on by one.

―... We did not find it difficult to predict the results of the decision. We made some tests
in some branches and implemented them using the bank card system and the results
were positive. We found we provided quick service to customers and got rid of the
queues that used to be in banks, which encouraged us to continue in making the
decision.‖ in addition‖.. (P1-A)

P1 confirmed that it was easy to predict results for this decision. This is relaying on the
success of other countries that have practically reached it. He also added that positive
results will have a big impact towards the performance of the bank. It will give the
opportunity to gain large profits by providing updated services to workers and the
required speed for it. Also, results show a reduction in workers costs, what is more
important is developing and introducing competition to the banks.

“... We did not find it difficult to predict the results of the decision. We made some tests
in some branches and implemented them using the bank card system and the results
were positive. We found we provided quick service to customers and got rid of the
queues that used to be in banks, which encouraged us to continue in making the
decision.”(P1-A)

The sixth section: Decision motive

P1 said that the decision was an opportunity not to be missed, but at the same time it
solved problems the bank had in all fields. This decision was an opportunity
considering it uses new technology adopted by the bank. It also solved many problems
faced by the bank, e.g. there are no full systems for information to guide the decision
making process and the lack of implementing developed method in solving problems

238
like researching procedures. Also, delaying in costumer services, settling payments
between banks and settling accounts between public sectors.

".... I believe that this is to solve the administrative problems such as increase the
number of staff, due to reliance on older systems which are incompatible with the
developments in the banking sector." (P1-A)

P1 confirmed that the top purpose was to develop and improve the bank‘s situation.
They consider making this decision was a large leap towards using computers because it
speeded services provided and reduced burocrotic loads. It also provided more time for
customers and employees of the bank and the ability of customers having access to
good service at any branch in any city of the country without the need of customers
contacting the branch they opened the account with. The customer can also know their
balance, total, details and dates of any transaction. They would be able to obtain cash
instantly.

P1 confirmed that the decision was correct. This is because the problem was that the
local banks do not use computers to manage their work, with the exception of a few.
There is no doubt that this has a negative effect on forming the main structure for the
national payments system and the addition of new products and services. This
supported the quick development of computer systems in banks and the introduction on
information technology. This will lead to the major developments in the bank‘s
performance, risk management and credit inspection, which will help banks in
providing a developed banking service. The participant added on this basis we can say
the main aim of this decision is to develop the Libyan banking industry, improve the
quality of its services and to enter a new phase to face globalisation.

“... We were certain that we made the right choice because we contracted McKinsey,
one of the largest technology companies in the world and which were of better quality
with a strong system of protection, and with more financial facilities”.( P1-A)

The seventh section: Environment al hostility-munificence

P1 agree that the banks environment was very safe and still stable adapting a recently
new strategy in the form of developing the bank and is considered to have no threats. In

239
the Libyan banking sector the process of collecting, merging and owning has began to
expand the size of its work and profits. It is also to achieve abundance in size and
variety, reduce cost and enter new fields of work. He added that “It is stressful
understanding the new operating method. The method is still new to us.”

In this vein P1 stated that there are no any indications of any threats towards the bank.
First of all there are a limited number of Libyan banks. There are clear limits and
policies in the Central Bank of Libya that insures to a certain extent the stiabability of
the banking sector in Libya, so no sudden downfalls occur. There might be limited
problems but not a complete downfall for the bank.

“... The activities environment in Libyan banking is still non-expanding, and governed
by the law and public policy; therefore we cannot control the market because of our
limited ability to control the environment.” (P1-A)

P1 agree that there is an opportunity for investment but not for a wide expansion. This
is because investment is controlled by the countries politics and the rules and
regulations published from the Central Bank of Libya. On this P1 said ―it is still the
beginning for the bank‘s investments. The involvement of private and foreign banks
gave us the investment opportunity. However, we are still at the beginning because we
do not have the experience and are still preparing ourselves and qualified individuals we
have for investment to a certain extent in many fields, but not a wide expansion.

The eighth section: the environmental uncertainty

P1 answered that these changes can easily be predicted whilst making this decision, but
from the products perspective this decision is considered as a new technology entering
the Libyan technology and a new product to the consumer, so therefore we hope to
improve our services to clients through this technology.

With regards to competition, the banking environment is considered safe and has
limited competition. Even though recent changes to Libyan banks have started to
emerge competition between our banks and others, we can still predict the opposition‘s
policies considering current circumstances. This is because the Libyan banks follow
laws published by the Central Bank of Libya and cannot ignore these rules, as for the
government‘s policies, such as the financial ones, are clear and stable.

240
 “... The competition in Libyan commercial banking has no effect on the Libyan market,
because the market is oligopolistic and characterized by the dominance of public sector
control. Despite the entry of foreign partners to the Libyan market, the situation
remains as before.” (P1-A)

The governmental policies cannot be predicted and are published as a law that has to be
implemented. However, it cannot over look these laws for government policies, for
example the central bank of Libya and therefore government policies cannot be
predicted when a decision is introduced and carried out.

“...some Government policies, for example, monetary policies issued by the Central
Bank of Libya, we can appreciate and predict, due to them being clear and fixed
policies. On the other hand, I can say that other government policies cannot be
predicted, because the government may issue any decision at could any time, and this
could affect the bank.” (P1-A)

P1 agreed that the only restriction the bank faced in this decision is the extent of how
acceptant individuals were to this technology. This is because of the education of
individuals and their acceptance to the technology.

The ninth section: Performance

P1 agreed that financial performance is considered among the important indicators in

the assessment processes between organizations .They added that they could measure
the results of decision through decreasing transaction costs, or they could measure the
profits resulting after a decision and compare it with previous years. He added that the
use of technology greatly assists the bank in the expansion and diversification of the
services provided to customers, which in turn affects portfolio profits and contributes to
raising the efficiency of financial intermediation.

“The Financial position of the Bank was good, we were able to fulfil all our obligations
with companies that we had contracts with, and we covered all expenses related to this
decision: for example, travel to other countries to get acquainted with this technology.
(P1-A)

P1 agreed that organisational effectiveness is an important indicator in the assessment

processes between organizations. He added that they could measure the results of this
decision through the, improvement in services provided to customers, the speed of
transactions between banks, and the efficiency level of banking management.

241
He identified that the operational efficiency of the bank to make this decision was good
in terms of the exploitation of the resources available in the bank, enabling them to
control costs and performance and the quality of their employees at different
administrative levels.

"I think we worked with all our energy in order to exploit the available resources to
reach the output." (P1-A)

The tenth section: decision effectiveness

P1 said that the banks have a number of goals it‘s aiming to achieve. One of which is
providing improved customer services such as easy balance transfers of Libyans living
abroad to their friends and families in Libya. It also contributes in expanding the
foundation of the bank accounts, plus reduces operational costs and reducing risks.
These will lead to implementing the immediate settlement system and would publish
final immediate briefs continuously throughout the day. This would reduce the risks
faced by credits and funds that exist between the bank and its costumers when settling
different transaction procedures.

P2 added that this decision will introduce new tasks and services of value to
customers. This means that the bank will be able to compete in the products and
services it can provide to customers.

P1 agreed that they achieved most of their aims they set. They did not accept any
negative results to this decision. However, they did accept very positive results they
hoped would happen from the first year, For example, providing a quick service to
customers by using electronic bank cards.

“... Customers were encountering difficulty in opening bank accounts, due to the lack of
using a new technology and difficulty administrative procedures.” (p1-A

P1 informed that they began to provide improved services to customers, such as making
balance transfers easier. Customers started using bank cards which made matters easier,
one of which is reducing quest in banks. They also speeded up transactions between
commercial banks, the central bank of Libya and foreign banks abroad, In addition the
speed of communication between the banks by using the internet, reducing cost, time

242
and effort. They also began providing new services such as Islamic products that abide
to the Sharea laws.

―... The level of profitability decreased from year to year before making this decision,
due to increasingly low volume of deposits and the number of customers of the bank.
The current situation of the Bank has led to a continuing increase in total deposits as a
result of the quality of banking services provided to customers, thus this decision had
contributed to increasing before tax bank profits‖. (P1-A)

P1 agreed that this decision was the right choice for the bank. This is because Libya
began to activate full economical rights. In the same vein, P1argues that

“the foreign investment in Libya from 95% of the volume of investment expenditures,
which is about 5, 6 billion Libyan dinars. In 2006, Libya announced a series of
procedures which are related to attract foreign capital.”

He said that the Libyan commercial banks have place in the nation economy, they are
as intermediation between savers and investors. So, this is the first step to develop bank.
In the same direction, PI is constant with this decision, because this will change many of
the conditions inside the bank. Due to that, the bank will start a new stage of private
investment according to the new banking Law, thus start a significant improvement in
the bank's performance and risk management and provide new banking services. Thus,
the bank should able to work network of branches in order to reduce the cost of bank on
one hand, to insure the level of service of the bank throughout the State. This allows
him to able to introduce new services quick and continue. Thus, the bank will be able to
reach with citizens who have bank accounts. In order to achieve all the requirements of
citizens of their operations easily and also will be able to implement consistent
standards for credit control, risk management.

243
Appendix (5) Themes and Sub-themes Definitions
Themes Definitions Measure
ments
1- Rationality Procedural rationality, High
defined as the extent to
which the decision process
involves the collection of
information relevant to the
decision and the reliance
upon analysis of this
information in making the
choice (Dean and Sharfman,
1993).
Low
2. Intuition `At any given moment, one High
is conscious of only a small
section of what one knows.
Intuition allows one to draw
on that vast storehouse of
unconscious knowledge that
Interpretation Sub-themes Definitions of Sub-themes (Operationalisations in italics) and
Interpretation
Where decision-makers follow a Identification The extent to which decision-makers identify the information
systematic process in collecting of information required when making a decision. The researcher made a
and analyzing information, in required judgement of the amount of information and its importance. The
order to reach crucial responses divided between high (h) and low (l) rationality.
information, to achieve goals of Decide methods The extent to which decision-makers rely on multiple methods
decision. of information to gather information. Based on the number of adequate methods
gathering which they used, the responses were divided between high (h) and
low (l) rationality.
Obstacles to The extent to which decision-makers faced several obstacles in
gathering gathering information.
information Based on the number of obstacles and their importance, the
responses were divided between high (h) and low (l) rationality.
A bank lacked the required Analyse The extent to which the decision-makers analysed relevant
resources (e. g. financial; relevant information when making a decision.
physical; human; and time information Based on number of adequate methods of analysing information,
resources) to search collect and the responses were divided between high (h) and low (l)
analyse the relevant rationality.
information. Crucial The extent to which the decision-makers focused their attention
information on crucial information during the making of a decision. Based
on the number of points which contributed to reaching a decision.
The responses were divided between high (h) and low (l)
rationality.
Where decision-makers follow Personal The extent to which decision-makers rely on personal
personal judgement in making judgement judgement when making a decision. Based on the ability of
decision with having a strong decision-makers to predict of decision successful, the responses
feeling of knowing what is were divided between high (h) and low (l) intuitiveness.
going to occur, which they have
accumulated via much
244
 includes not only everything experience in dealing with
that one has experienced or problems.
learned either consciously or
subliminally, but also the Low Decision-makers did not use Past experience The extent to which past experience has an important role in
infinite reservoir of the personal judgement and past making a decision.
collective or universal experiences to make the Based on The sum of respondent's ratings depended on the extent
unconscious, in which decision. to which top managers had high education and previous
individual separateness and professional experience, the responses were divided between high
ego boundaries are (h) and low (l) intuitiveness.
transcended' (Vaughan,
1979: 30).
Intuition does not come
easily, but it requires many
years of experience and a
complete understanding of
the business (Isenberg, 1984;
Seebo, 1993).
3. Political The political model is an High Decision-makers use all the Openness with The extent to which decision-makers were open with each other
behaviour organization including political tactics to influence each other about about their interests and preferences related to the decision.
differentiated groups of decisions which affect their interests and Based on the sum of respondent's ratings of the diversity of
people with different positions and interests in bank. preferences interests‘ among decision-makers. But the responses were divided
motivations for getting between high (h) and low (l) political influence.
involved in decisions Low Decision-makers use all the Power to defend The extent to which the decision-makers used their power in
(Butler, 2002). political tactics to protect bank preferences order to defend their interests and preferences. Based on
interest. imposing their opinions and the power of their administration
positions to defend their interests. The responses were divided
between high (h) and low (l).

Bargaining To extent to which the decision affected by bargaining among

among decision decision makers.
makers Based on differences among managers when making decisions.
The responses were divided between high (h) and low (l) political
influence.

245
4. Decision The importance of decision
important is represented by the costs of
decision and benefits of
decision, thus managers
considered these when
anticipating more benefits
from the decision, thus
rational processes in making
decision are more costly in
terms of search and
analysis. Therefore, the
success of organization s
depends on mangers will be
expected to be more rational
when making crucial
decisions (Carter, 1971;
Hickson et al., 1986; Stein,
1980).
5. Uncertainty ‗The degree of choice will
of the decision therefore be limited not only
by action determinism and
the constraints of the intra-
organizational political
process; it will also be
inhibited by limited and/or
ambiguous information‘
(Child, 2002: 113).
High If decision-makers bay more
attention to study the great
importance of decision e. g.
time and resources required and
its benefits e. g. the effect on
bank performance.
Low If decision-makers do not
adequately study the importance
of decision e. g. time and
resources required and its
benefits.
High Decision-makers have clear
information and necessary
procedures for making a
decision, as they can predict the
outcome of a decision.
Low Decision-makers did not have
clear information and necessary
procedures for making a
decision, as they can predict the
outcome of a decision.
246
Decision The extent to which a decision was important.
importance When top managers spent much time and money to make the
decision, the responses were divided between high (h) and low (l)
importance.
Subsequent The extent to which a decision to act was used as a base for
decision subsequent decisions. Based on the number of subsequent
decisions which were made or under procedure, the responses
were divided between high (h) and low (l) importance.
Delaying this How far the DMP was seen as protracted. Based on the number
decision of reasons for a delay by which a decision could have been
quicker, the responses were divided between high (h) and low (l)
importance.
Clarity of kind The extent to which there was clarity of the kind of Information
of information to be collected for making a decision. The responses were
to be collected divided between high (h) and low (l) uncertainty.
Uncertainties How far there were uncertainties about the actions to be taken
about the in order to make a decision. Based on knowledge of all the
Actions to be procedures which had to be taken, the responses were divided
taken between high (h) and low (l) uncertainty.

6. Decision Decision motive refers to
motive how the CEO perceives a
strategic issue either as a
threat or as an opportunity,
and comprehensiveness
refers to the extent to which
organizations attempt to be
exhaustive or inclusive in
making and integrating
strategic decisions
(Fredrickson and Mitchell,
1984, Ashmos et al., 1998).
7. Munificence refers to the
Environmental ability of the environment to
al hostility- support the sustained growth
munificence of an organization (; Dess &
Beard, 1984).
The environment is seen as a
pool of resources and the
degree of resource
abundance is called
environmental munificence
(Castrogiovanni, 1991).
High When the decision-makers
categorise and label a DM as an
opportunity to enter the loop
and modify organization
activities, or as a crisis, and they
also have confidence that
making the decision was the
right choice.
Low In the case of decision-makers,
they did not have a motive of
DM, as they were not confident
of the DM.
High The bank‘s environment is very
safe and stable, and all
resources are available.
Low The bank‘s environment is not
safe and stable, and the banking
environment is poor in terms of
availability of resources.
247
Difficulty of How far it was difficult to predict the outcomes of a decision.
predicting the Based on the resources available when making the decision, the
outcomes responses were divided between high (h) and low (l) uncertainty.
Motivation for The extent to which decision-makers were motivated by the
making the needs of their bank when making a decision. Based on the
decision number of advantages which a bank gained, the responses were
divided between high (h) and low (l) motivation.
Confidence in How confident the decision-makers were that they were making
making the the right choice. Based on the number of and quality procedures
choice taken, the responses were divided between high (h) and low (l).
Threat to The extent to which a bank faced threat to its survival. Based on
survival the number of threats (risks) which banks faced, the responses
were divided between high (h) and low (l) hostility.
Stressfulness The extent to which a bank face stressfulness. Based on the
number of stresses which faced a bank, the responses were
divided between high (h) and low (l) hostility.
Dominance of The extent to which bank can control and dominate the banking
the company industry. Based on the factors The bank cannot control for a
number of reasons, the responses were divided between high (h)
and low (l) hostility.
8. Managers' perceptions of
Environmental environmental uncertainty
uncertainty represent an important input
for SDMPs (Calori et al.,
1994).
Uncertainty may be related
to factors which cannot be
known, such as the rates of
interest and inflation over
the coming years (Daft &
Lengel, 1986).
9. `The way an organization
Perform performs visa-visa other
ance similar organization s in its
industry, not only on
traditional financial
indicators of performance,
but on important non-
financial indicators as well'
(Khatri and Ng, 2000: 68).
High Factors which can be known
and predicted
Low Factors which cannot be known
and predicted
. responses were divided between high (h) and low (l) certainly
High When all the objectives of a
decision are achieved by top
managers at the time.
Low When all of the objectives of a
decision are not achieved by top
managers at the time.
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Product of new The extent to which decision-makers were able to product of
services new services. Depending on the degree of predictability
concerning product demand and the preferences of clients, the
responses were divided between high (h) and low (l) certainly.
Competition The extent to which the decision-makers were able to product
competition. Depending on the degree of predictability
concerning changes in the markets and changes in competitors'
strategies the entry of new companies into the market; the
Governmental The extent to which decision-makers were able to predict
policies governmental Policies. Depending on the degree of
predictability concerning monetary policy and legal regulations,
the responses were divided between high (h) and low (l) certainty.
Economy The extent to which the decision-makers were able to predict
economic. Depend on the degree of predictability concerning the
processes of economic reform; the responses were divided
between high (h) and low (l) certainty.
Financial and The extent to which the financial performance of the most
business important indicators. The number of indicators by respondents
performance for example, the return on assets, operating profits and market
share, the responses divided between high (h) and low (l).
Organizational The extent to which the organizational effectiveness of the most
effectiveness important indicators. The number of indicators by respondents
for example, employee satisfaction and social responsibilities and
the reason for that, the responses divided between high (h) and
low (l).
10. Decision "Strategic decision
effectiveness effectiveness, defined as the
extent to which a decision
achieves the objectives
established by management
at the time it is made"
(Sharfman and Dean, 1996,
P 372).
High When all the objectives of a Success in The extent to which a decision is achieves the objectives
decision are achieved by top Achieving established by management at the time it is made. Based on the
managers at the time. Decision number of the objectives which were achieved by a decision, the
Objectives responses were divided between high (h) and low (l)
effectiveness.
Low When all of the objectives of a Hindsight that To extent which hindsight suggests that the right choice was
decision are not achieved by top the right choice made.
managers at the time. was made Based on the number of changes in a bank, the responses were
divided between high (h) and low (l) effectiveness.
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Appendix (6): Evidence from interviews which support interpretation of a high
level of co-operative behaviour among senior bank staff.

“...definitely, yes, we collected information about this decision. The executive has
internal committees and their staff collected the required data and prepared periodic
reports internally. Usually, the executive specified what information is needed to be
collected for each employee. I was a member of the Committee, we cooperated with
each other to get information, and we acquired the assistance from other departments.
Whereas, in some cases, the executive of the project independently collects the
necessary information, and presents the report in the meeting which is held between the
President of the Board Directors and managers of departments.” (P3-A).

“…As we have acquired the information through our personal relationship with other
mangers in different departments in the bank, and by virtue of the friendship between
staff and colleagues which we create between us. This way it was easier for us to get the
information.” (P2-A).

“Our committee worked together, and the spirit of cooperation and collective
construction of common ideas helped to create friendships among them. This helped to
determine needs and the nature of information concerning contracts, and how to ensure
compliance with Islamic laws, etc.” (P9-Bank B).

“…We met with the President of Board of the bank and we talked and decided to form
an internal committee consisting of a number of the staff headed by the Director of
training and management. We asked this committee to collect the information by the
help of other departments and sections, and to prepare a report explaining the required
level that should have been reached by the employee and the type of needed training.
The managers cooperated among themselves to collect the information and data. They
had known each other a long time in the field of their work.” (P11-B)

"...I think the information they collected was sufficient for DM. We did not need any
additional information. We received assistance by staff in different departments, and
from other managers in other banks." (P13-Bank C)

“In Amman‟s bank, the training director is friend of mine and class mate since we were
studying together. I contacted him and I got the information from him and he helped me
too much regarding to the example… Which methods used to do staff training and did
they benefit from the training programs and so on. Note that the Amman‟s bank had the
high-quality service to the customers.” (P15-Bank C)

“I have got cooperation and the information from one of my relative‟s works who works
in one of the Arab Islamic banks (no need to mention to the names as you know) and he
tells us a lot of information we needed”. ”. (P6-A)

“… I believe all administrations cooperated with the Committee on gathering the

necessary information by virtue of personal relationships and the interest of the bank
about the problem from which the bank was suffering. In addition, there was a kinship
between members of the committee, which it facilitated the work, including where there
was an atmosphere of understanding of views between members of the committee". (P5-
A)
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Appendix (7): Evidence from interviews which support interpretation of a high
level of anxiety of senior managers.

“Because this decision is very important, the Bank took careful steps. I believe, so far,
every step concerning the decision has been well planned and followed. I cannot think
of any consequences.” (P2-A)

"... We did not have the technology need and trained personnel for this strategic step the
Bank tried to take.” (P2-A)

“It was very important for us to be very careful in what we are doing…..We were at the
point of making a decision that concerns a completely new way of doing things, and this
involved so much money being invested. Because we wanted to make sure that the
decision succeeded, we relied more on past experience than on personal judgement.”
(P3-A)

“The regulatory and administrative constraints imposed by the law and the central
bank of Libya let us we do not have enough freedom in take necessary procedure to
make this decision also it is contributed to the delay in making.” (P2-A)

“…We can say that all financial and human capacities are available at the bank. The
problem is that the bank is controlled with policies and regulations. This makes the
bank decide on some procedures because the bank should go back to the Libyan Central
Bank to have its agreement on any procedures that relate to this decision.” (P6-A)

“…The Islamic Murabaha decision is a kind of radical change of the bank, and
therefore we were worried that we would not achieve the goals that we sought. Because
it is part of the current reform process in the banking industry and Libyan economy in
general, it is an economic reform that makes opportunities for bank investment
available. It also offers new services for the Libyan community.” (P4-A)

“It is good for the Central bank to regulate and coordinate the industry, but the banks
also need to be allowed some freedom to allow for competition, which is good for the
market development. My hope is that this will be the case when foreign banks start
joining the Libyan banking industry.” (P5- B)

“This decision was necessary because Libyans have wanted to have the Islamic
Murabaha. They therefore received it well when it was introduced, as it was based on
Islamic law……. Currently, we are in the process of identifying further strategic
decisions to make. To help in that plan, we have set up marketing and accounting
committees to work separately and analyse our performance so far, and also come up a
plan concerning strategies to better our services and response to the customers and
general public.” (P9-B)

“…..the managers lacked experience in making this decision and the decision requires
a greater knowledge of Islamic law. Thus this decision required experience in other
aspects, such as Islamic Sharia, therefore we used the experience of some auditors who
had extensive experience in Islamic Sharia. However, this was not enough, because we
also needed to have staff familiar with Islamic law.” (P7-B)

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“Of course experience played a very effective role in making this decision. The
members participating in making this decision were found to be sound in previous
experience in the field of banking, having not less than 20 years and holding scientific
qualifications....... but we still wanted people who had more experience related to this
decision in terms of identifying training needs. We still felt we had inadequate
experience and this made us concerned about taking the correct decision; therefore, we
used the aid of a few experienced individuals in the field of banking business from other
banks, especially those who had a very good history in this field.” (P12-B)

“This decision is important to us, and again it is a step required by regulation.

Although we had few staffs with educational and professional knowledge, we did not
want to experiment too much, so we used expert knowledge from Arabic Banks in
countries like Lebanon and Jordan.” (P12-B)

"..... I believe that due to the importance of training in Bank, the top managers take
enough time to study and analyse all aspects of the decision, in order to achieve the
objective of training........ And maybe there are other objectives that can be achieved
from this decision." (P11-B)

“Certainly, it was an important decision. For a long time there was the need for the
bank to introduce training courses in all fields. We have organized, among the training
plan for the year 2008, very interesting training programs, which included: training
courses, seminars, forums in the field of banking business and assisting programs in
English language and computer. The number of participants in these training courses
was 1018 trainees.” (P10-B)

"I think that although we have attained a certain percentage of our goals, we are still
suffering from the administrative complexities of the Central Bank of Libya that governs
us.” (P10-B)

“…We, in the bank consider the training decision as a complementary decision to the
economical reforming process pursued by the state at the present time by investment in
human resources. Therefor this decision was very important.” (P11-B)

“…I think the bank started to develop a strong position after introducing one of the
Arabic banks as a partner with a 17% share; the diversification of its activities and
introducing new products helped to attract more customers.” (P12-B)

“Of course, we faced some obstacles in gathering information, due to many reasons.
For example, as a big bank we had many branches and therefore so many
administrative bottlenecks. There was also the problem of regulatory control and
complexity of administrative procedures from outside (such as Libyan Central Bank).”
(P16-C)

“We have made many mistakes in the past. For example, not taking the steps to train
our staff in the past and bring them up to modern service levels. …. We cannot afford to
make mistakes in this decision, because it is very important to our future. Competition is
very likely in the future, and it is important that we should be careful in all our step
DM” (P15-C)

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"…We were already very late making this decision, we were suffering from problems
with the customers, for example, mistreatment of customers by employees and poor
service provided to them ... In addition we were slower than other banks in keeping
pace with technological developments in the training of personnel and I think that the
delay during making this decision was due to the complexity of the regulations and laws
governing banks in general, set down by the Libyan government and Central Bank of
Libya ." (P13-C)

“...in spite of some economic openings and some investment opportunities, we are still
under pressure and at the mercy of these laws and policies governing the operations of
investment by the Central Bank of Libya.” (P14-C)
“...We depended on the analysis of information in the reports, cost analysis and
information gathered which was based on the study of Engineering Consulting
Bureau.” (P2-A)

"... We had difficulties in making this decision thus we depended on consulting firms
from abroad, for example, Jordan. "(P2-A)

“... I think we did not use intuition, because the decision to introduce the new
technology was based mainly on scientific methods to gather information and the
necessary data and analysis besides, experts from foreign consulting firms”. (P2-A)

“…We have hosted one of the economic experts in Islamic banking from our brothers in
Qatar to give three days lectures about the pattern of Islamic profit system and the basis
of converting to it. This can be done perfectly by combining all the aspects of Islamic
law, credit, marketing, accountancy and administration. This program was directed to
all the staff in the main bank quarters and the branches.” (P5-A)

“…We made a contract with Dr. Elsadek Abd Elraman Algharyani and Dr. Usama
Alsolabi. Both are specialized experts in financial dealings from the legitimate side.
They also have experience and write works that discuss the financial deals from the
legitimate point of view in Islam.” (P5-A)

"…Some information was collected based on external sources. Formal visits were
organized to Arab banks implementing the same system, such as Jordanian Islamic
Bank and Quatrain Islamic bank." (P8-B)

“To make sure that our training decision had any chance to succeed, we first analysed
our internal environment to find out who needed what and where and how. …. Then we
consulted people and banks with similar training experience. Then we applied the
knowledge we gained to our situation and monitored things regularly too, to see if and
when things needed to be changed.” (P12-B)

“…We also depend in collecting the information on the organized official visits to the
Arabic banks to have an idea about the latest methods and techniques used in training
programs for the staff, and the possibility to apply them in our bank. We sent a group of
employees accompanied by the director of training to the Arabic bank of Jordan for 15

253
days. Again, the staffs were selected from those who are close to them, only those with
whom they have a personal relationship or kinship.” (P10-B)

"…We held several visits to the Arab Bank of Qatar and the Bank of Jordan and Egypt
before the start of making that resolution. We sent about 3 committees headed by the
department to managers of these banks, the duration of the mission took about 10 days
to identify the developed methods of training needs or the developed styles that we will
rely upon in the training of staff which area should the employee be subject to
training.... We asked officials to provide detailed reports about that.” (P14-C)

254